Which of the Following Is a Principle of the Insurance

question 187

Multiple Choice

Which of the following is a principle of the insurance industry?

• A) Trade in risk can produce mutual gains.
• B) Diversification can increase risk.
• C) Deductibles add to the problem of moral hazard.
• D) Adverse selection should be used to reduce insurance costs.

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Definitions:

Association

A connection or relationship between ideas, objects, or events, often formed through experience or learning.

Mainstream Media

Traditional forms of mass communication, such as newspapers, television, and radio, that reach a large audience and have significant influence on public opinion and culture.

Stereotyped Ways

Fixed, generalized beliefs and attitudes about specific groups, often based on oversimplified assumptions.

Violence

Physical force exerted for the purpose of causing damage or injury to people or property.