The Two Big Problems Facing Insurance Companies in Trying to Manage

question 82

Multiple Choice

The two big problems facing insurance companies in trying to manage risk are:

• A)risk pooling and diversification.
• B)risk pooling and adverse selection.
• C)adverse selection and moral hazard.
• D)moral hazard and diversification.

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Definitions:

Interactions

The reciprocal actions or influences that objects or individuals have on each other.

Drug-drug

Refers to interactions between two or more drugs, which can affect how the drugs work or increase the risk of side effects.

Adverse Reactions

Undesirable or harmful reactions experienced after the administration of a drug or therapy.

Z-track

A technique for intramuscular injection that minimizes leakage of the medication into the subcutaneous tissue.