The Idea of an Insurance Company "Pooling" the Risk Means

question 52

Multiple Choice

The idea of an insurance company "pooling" the risk means that

• A) the risk is completely eliminated from society.
• B) the insurance company requires buyers to pay a large deductible.
• C) the risk is spread over a large population.
• D) the insurance company insists on a pooling equilibrium.
• E) moral hazard and adverse selection are eliminated.

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Definitions:

Command

An instruction to a computer or software application to perform a specific task.

Run Button

A graphical button in software that initiates the execution of a program or query.

Close

The action to terminate an application window, document, or file.

Macro

A set of instructions or a script that automates repetitive tasks in software applications.