Part 1Gustavo is a young doctor who lives in a country with a relatively inefficient legal and financial system. When Gustavo applied for a​ mortgage, he found that banks usually required collateral for up to​ 300% of the amount of the loan. Part 2Why might banks require that much collateral in a financial system like​ Gustavo's country? A. An inefficient legal system implies strong property​ rights, and under such a strong​ system, collateral is more highly valued and hence more desirable. B. An inefficient legal system implies weak property rights but also high property​ values, making collateral more highly valued and hence more desirable. C. An inefficient legal system implies weak property​ rights, and collateral helps banks recoup some of their loan if the borrower defaults. Your answer is correct.D. An inefficient legal system implies strong property​ rights, and collateral helps banks recoup some of their loan if the borrower defaults. Part 3As a​ result, when compared to other​ countries, we would expect​ Gustavo's nation to​ have: A. more investment and slower economic growth. B. more investment and faster economic growth. C. less investment and faster economic growth. D. less investment and slower economic growth.