Which of the Following Is TRUE If the Insurance Market

question 191

Multiple Choice

Which of the following is TRUE if the insurance market is efficient?

• A) The deductibles eliminate moral hazard.
• B) Society as a whole engages in less risky behavior.
• C) It transfers risk from those who most want to get rid of it to those least bothered by the risk.
• D) Premiums are always kept to the level of a fair insurance policy.

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Definitions:

Average Time

The mean period taken for a task or process to occur; calculated by summing the total time taken and dividing it by the number of occurrences or instances.

Customers

Individuals or entities that purchase goods or services from a business.

System

A set of interacting or interdependent components forming an integrated whole to serve a common purpose.

Average Number

The sum of values divided by the count of values, used to find the central or typical value in a set of numbers.