Which of the Following Is an Example of Moral Hazard

question 48

Multiple Choice

Which of the following is an example of moral hazard?

• A)The healthiest people buy life insurance.
• B)The sickest people buy health insurance.
• C)A person with health insurance rides a motorcycle without wearing a helmet.
• D)A person with life insurance exercises daily and eats healthy foods.

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Definitions:

Financial Manager

A professional responsible for managing the financial health of an organization by overseeing investment activities and planning for the long-term financial strategy.

Corporation

A legal entity that is separate and distinct from its owners, which can own assets, incur liabilities, and conduct business.

Financial Manager

A person responsible for managing an organization’s financial activities, including planning, investments, and managing financial resources.

Capital Structure

The combination of borrowing and ownership funding a business employs to support its activities and expansion.