The Fact That Someone with a High Risk of Medical

question 38

Multiple Choice

The fact that someone with a high risk of medical problems is more likely to buy a lot of health insurance is an example of something that will give rise to

• A) adverse selection.
• B) monitoring.
• C) moral hazard.
• D) irrational behaviour.

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Definitions:

Unmodified Opinion

An auditor's report that concludes the financial statements of an entity are fairly and appropriately presented, without any identified exceptions.

Unusual Items

Refers to uncommon or rare transactions that are not expected to occur frequently within the normal course of business.

Accounting Principles

Fundamental guidelines or rules that form the basis for accounting practices, such as relevance, reliability, comparability, and consistency.

Quick Ratio

A liquidity measure that indicates a company's ability to cover its short-term liabilities with its most liquid assets.