Which of the Following Actions Best Illustrates Adverse Selection

question 32

Multiple Choice

Which of the following actions best illustrates adverse selection?

• A)A person purposely chooses bonds of corporations with high default risk because of the high returns.
• B)A person dislikes losing $400 more than he likes winning $400.
• C)After obtaining automobile insurance a person drives less carefully than before.
• D)A person intending to take up dangerous hobbies applies for life insurance.

Understand how hypotheses are utilized in psychological research to predict behaviors or outcomes.

Describe the methodological and ethical considerations in using animals for research.

Understand the characteristics and technical understanding of creative individuals.

Recognize various types of innovations, including managerial, process, and product innovations.

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Definitions:

Coping With Stress

Employing strategies to manage or alleviate stress, which may include relaxation techniques, physical activity, and seeking social support.

Upcoming Exam

A scheduled test or assessment in the near future that evaluates a student's knowledge or skills in a particular subject or area.

Chemical Imbalance

A theory suggesting that mental health conditions are associated with changes in neurotransmitter levels or actions in the brain.

Bulimia

An eating disorder characterized by binges on large quantities of food, followed by purges of the food through vomiting or the use of laxatives.