Adverse Selection Results in Which of the Following

question 70

Multiple Choice

Adverse selection results in which of the following?

• A)no underwriting is necessary
• B)applicants for insurance have a higher probability of loss than the average group of insureds
• C)the federal government must write the insurance
• D)better insureds are attracted to the group

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Definitions:

Volume Variance

A financial metric that measures the difference between the expected sales volume and the actual sales volume.

Spending Variance

The difference between the budgeted or standard cost of something and its actual cost, which can indicate areas of inefficiency or savings.