The Tendency for Unhealthy People to Seek Life or Health

question 39

Multiple Choice

The tendency for unhealthy people to seek life or health insurance at standard rates is an example of

• A)moral hazard.
• B)fundamental risk.
• C)attitudinal hazard.
• D)adverse selection.

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Definitions:

Times Interest Earned Ratio

A financial ratio that measures a company's ability to honor its debt payments by comparing its interest expense to its operating income.

Operating Cycle

The duration between the purchase of inventory by a business and the receipt of cash from accounts receivable, indicating the speed at which a company turns inventory into cash.

Equity Multiplier

A financial ratio that measures a company's leverage by comparing its total assets to its total equity.

Year 2

The second year in a specified timeframe, often used in financial and performance analysis.