In which case is the moral hazard present?

A. A Bank manager with moderate occasional consumption of alcohol

B. A race goer with betting habits and usually a heavy consumer of alcohol

C. A university professor asking for a large cover on his life

D. Where in a proposal the nominee is a near dependant of the proposer

Answer: Option B

Solution(By Examveda Team)

A race goer with betting habits and usually a heavy consumer of alcohol is the moral hazard present. Moral hazard is the risk that a party has not entered into a contract in good faith or has provided misleading information about its assets, liabilities, or credit capacity.