The RAND Health Insurance Experiment Compared Costs of HMOs with the Costs

question 10

Multiple Choice

The RAND Health Insurance experiment compared costs of HMOs with the costs of indemnity insurers. The study

• A) confirmed the cost-saving potential of HMOs.
• B) Found no cost-saving by HMOs.
• C) the HMO had per capita costs that were 28% lower than the indemnity
• D) both a and c

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Definitions:

Zero Growth Stock

Zero growth stock refers to shares in a company that is expected to experience neither growth nor decline in its dividends or earnings in the foreseeable future.

Required Rate

The minimum return an investor is willing to accept when investing in a project, taking into account the risk level of the investment.

Annual Dividend

The total amount of money paid by a company to its shareholders in the form of dividends over a year.

Gross Domestic Product

A measure of the economic output of a country, calculated as the total value of all goods and services produced within the country's borders in a specific time period.