Match (by number) each concept with its description: Concept Adverse selection Asymmetric information Moral hazard Description 1. A situation where the borrower might engage in activities that are undesirable from the lender's point of view, because they make it less likely that the loan will be paid back 2. Investing in a collection (portfolio) of assets whose returns do not always move together, with the result that overall risk is lower than for individual assets. 3. Occurs when the potential borrowers who are the most likely to produce an undesirable (adverse) outcome-the bad credit risks-are the ones who most actively seek out a loan and are thus most likely to be selected 4. A situation where one party often does not know enough about the other party to make accurate decisions. 5. A process of borrowing funds from the lender-savers and then using these funds to make loans to borrower-spenders,