In Order for Insurance Companies to Generate Predictable Payouts, They

question 21

Multiple Choice

In order for insurance companies to generate predictable payouts, they need to:

• A) spread the risk across many policies.
• B) accept policyholders from a very specific geographic area.
• C) focus on insuring only specific events, for example only fire.
• D) offer only life insurance.

---

Definitions:

Arousal

A state of alertness and mental and physical activation.

Incentive

An external stimulus that motivates behavior (for example, money or fame).

Drive-Reduction Theory

A theory suggesting human behavior is motivated by the desire to reduce internal drives of needs, such as hunger.

Getting Some Food

The act of obtaining food to satisfy hunger, which can encompass a range of behaviors from purchasing food at a store to preparing a meal.