In an Efficient Allocation of Risk

question 176

Multiple Choice

In an efficient allocation of risk:

• A)all risk is eliminated.
• B)those who are most willing to bear risk,bear it.
• C)all risk is diversified.
• D)all insurance premiums are equal to the expected value of the claims.

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Definitions:

Attributional Ambiguity

A psychological phenomenon where individuals are uncertain if the treatment they receive, especially in terms of success or failure, is based on their abilities or on stereotypes and biases associated with their social identity.

Negative Experiences

Unpleasant or harmful events or interactions that can impact an individual's mental, emotional, or physical well-being.

Rejection Identification Theory

A psychological theory suggesting that individuals may strengthen their identification with a rejected group, thereby preserving their self-esteem.

Discriminated

Treated differently or unjustly on the basis of race, age, sex, or other attributes, often resulting in disadvantage or exclusion.