A Fairly-Priced Insurance Policy Is One in Which

question 38

Multiple Choice

A fairly-priced insurance policy is one in which:

• A)the insurance premium is equal to the expected value of the promised insurance payment.
• B)the insurance premium is equal to the expected value of the promised insurance payment plus a small profit for the insurance company.
• C)the insurance premium is equal to the variance of the expected value of the promised insurance payment.
• D)the insurance premium is equal to the variance of the expected value of the promised insurance payment plus a small profit for the insurance company.

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Definitions:

Depression

A mental health disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in activities.

Setbacks

Obstacles or hindrances that delay progress or cause a temporary reversal of fortunes or outcomes.

Dissociative Identity Disorder

A serious type of dissociation that results in a disconnection within an individual's thoughts, memories, and identity, previously recognized as multiple personality disorder.

Schizophrenia

A mental disorder characterized by disturbances in thought, perception, and behavior, leading to hallucinations, delusions, and disorganized speech.