Why Is a Large Number of Exposure Units Required for a Risk

question 19

Multiple Choice

Why is a large number of exposure units required for a risk to be insurable?

• A)it allows the insurer to accurately predict the aggregate dollar amount of loss
• B)it allows for at least some losses to occur
• C)it reduces the moral hazard
• D)it reduces both the moral and the morale hazard

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Definitions:

Drug Use

The consumption of substances that alter psychological or physiological states, which can include legal medications, alcohol, and illicit drugs.

Intimate Self-disclosure

The process of revealing personal, private thoughts or feelings to someone else, fostering closeness and trust.

Idealized View

A perception or representation of someone or something in an ideal or perfect form, often ignoring realistic flaws or limitations.

Conflicts

Situations in which opposing demands, interests, or impulses within an individual or between people lead to tension or disputes.