Which of the Following Is NOT an Example of Adverse

question 18

Multiple Choice

Which of the following is NOT an example of adverse selection?

• A)A family with a home ten feet from a large river buys flood insurance.
• B)A company uses the proceeds of a new stock sale to build an unnecessarily luxurious new headquarters.
• C)A terminal cancer patient buys life insurance.
• D)A company in serious financial trouble offers to pay you 30% on a loan.

---

Definitions:

Dynamic Environment

An environment that undergoes rapid and unpredictable changes, requiring organizations or individuals to adapt quickly.

Core Competencies

are the unique capabilities or advantages that give an organization a competitive edge in the market.

Network Structures

Describes organizational layouts where groups or individuals work independently but remain connected through technology, collaboration, and shared goals.

Functional Structures

Functional structures organize a company into departments based on specialized functions, such as marketing, finance, or production, facilitating specialization and operational efficiency.