Question

A ________ is when one party in a financial contract has incentives to act in its own interest rather than in the interests of the other party.
moral hazard
risk
conflict of interest
financial panic

Answer 1

Answer:

conflict of interest                          

Explanation:

An industry conflict of interest generally relates to a scenario where the personal ambitions of an employee seem to be in conflict with both the professional interests owed to the hirer as well as the corporation where they are engaged.  

A conflict of interest emerges when an individual chooses personal benefit over an institution's obligations in that he or she is a stakeholder and in some way misuses his or her status for personal benefit.

Conflict of interest may result in legal consequences and job losses. Nevertheless, when there is a presumed conflict of interest or the individual has still not functioned maliciously, the individual may be removed from the scenario or judgment whereby a probable conflict of interest may emerge.