Movie Report

1-How the concept of moral hazard can be applied to the story of the movie (1 paragraph)? 2- What is your impression about the movie (1 paragraph)? 3- What could have been done to prevent the crisis from occurring (1 paragraph)? No more than 1 page, 1 inch all around margins, Times New Roman 12-point font, single space.
guideline_of_movie_report.docx

Unformatted Attachment Preview

Don't use plagiarized sources. Get Your Custom Essay on
Movie Report
Just from $13/Page
Order Essay

Movie Report
The movie, Inside Job (2010), is an American documentary film describing the antecedents and
consequences of the 2008 financial crisis. You can rent it online at an affordable cost (either
Amazon Prime Video, $2.99; YouTube, $3.99; or VUDU, $0.99). Please refer to the movie
details below.
•
Inside Job (2010), Director: Charles Ferguson, Narrated by: Matt Damon
Please read the following instructions carefully!
•
•
•
•
•
Individual assignment.
Upload your report on Canvas – Assignments – the Movie Report section before the deadline (1
pm, 4/28). No excuse will be accepted.
No more than 1 page, 1 inch all around margins, Times New Roman 12-point font, single space.
10% of your final grade (100 points).
Outline:
o How the concept of moral hazard can be applied to the story of the movie (1
paragraph)?
o What is your impression about the movie (1 paragraph)?
o What could have been done to prevent the crisis from occurring (1 paragraph)?
Moral Hazard
By Justin Pritchard
Moral hazard is a situation where somebody has the opportunity to take advantage of
somebody else by taking risks that the other will pay for. The idea is that people might ignore the
moral implications of their choices: instead of doing what is right, they do what benefits them the
most.
The Concept of Moral Hazard
The concept of moral hazard comes from the insurance industry. Insurance is a way to
transfer risk to somebody else. For example, an insurance company will pay up if you damage a
rental car (and you have the proper insurance in place). In exchange, you pay a price that seems
fair, and everybody wins. The assumption is that neither you nor your insurance company
expects any damage to occur. The insurance company uses statistics to estimate how likely the
vehicle is to be damaged, and they price their services accordingly. But there are times when you
might have more information than your insurance company. For example, you might know that
you’re going to drive into the mountains on rough, narrow roads. So you get the most generous
insurance coverage possible, and you don’t worry about bouncing over rocks or scratching the
paint in thick brush along the side of the road. In fact, you have a perfectly good car at home, but
there’s no way you’re going to drive your car up that road. Moral hazard says that you have an
incentive to take risks that somebody else will pay for: you get to go where you want, and you
don’t suffer the consequences. The more insulated you are from risk, the more temptation you
face.
Moral Hazard and Loans
Moral hazard became an important consideration (in some cases after the fact) during
the financial crisis around 2008. There are two ways to think about moral hazard and loans.
Lenders were very eager to approve loans prior to the mortgage crisis. Some mortgage
brokers encouraged “subprime” borrowers to lie, or they altered documents to make it appear as
if borrowers were able to afford loans that they really couldn’t afford. For example, sometimes
inaccurate income numbers were reported, or no documentation was required to prove
claims about ability to repay. Why would lenders hand out money when they don’t really know
if they’ll get repaid – especially if they have to lie to get the loans approved? In many cases, the
lenders were only originating (or selling) the loans. After the loan was approved and funded,
lenders would sell the loans to investors – who later lost money. In other words, the lender took
little or no risk (but the lender had an incentive to put risk on somebody else, because originators
get paid for making loans). What’s more, lawmakers and the public became scared. They
worried that if major banks collapsed (some of them were loan originators, while others held
risky assets), they would bring down the US economy – not to mention the global economy.
Because these banks were considered “too big to fail,” the US government helped some of them
weather the economic storm: if those banks suffered large losses, the government promised to
protect deposits (in some cases through the FDIC). Of course, the US government is funded by
taxpayers, so the taxpayers were ultimately bailing out the banks. In other words, lenders
and investment banks took risks that were borne by taxpayers.
Moral hazard also became an issue for borrowers. As millions of homeowners struggled
to pay their mortgages and defaults skyrocketed, government programs offered relief. People
could avoid foreclosure thanks to funds and guarantees from the US government. Some worried
that borrowers would actually have an incentive to walk away from their mortgages: they
were underwater on home loans, and some might be tempted to get government aid that they
didn’t need. In some cases, their credit might suffer, but in other cases borrowers would come
out unscathed (in some ways at least –struggling borrowers almost certainly experienced
financial hardship and emotional stress).
Source: https://www.thebalance.com/moral-hazard-what-it-is-and-how-it-works-315515

Purchase answer to see full
attachment

Order a unique copy of this paper
(550 words)

Approximate price: $22

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency

Order your essay today and save 15% with the discount code ESSAYHELP15