Which of the Following Best Illustrates Adverse Selection

question 146

Multiple Choice

Which of the following best illustrates adverse selection?

• A)A person adds risky stock to their portfolio.
• B)A person who has narrowly avoided many accidents applies for automobile insurance.
• C)A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
• D)A person gets homeowners insurance and then checks their smoke detector batteries less frequently.

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Definitions:

Balance

Balance is the ability to maintain the body's center of mass over its base of support, a crucial aspect of all movements and essential for daily life.

Thalamus

A vital brain structure acting as a relay station, transmitting sensory and motor signals to the cerebral cortex, and regulating consciousness, sleep, and alertness.

Sensory Projection

The process whereby sensory stimuli are transmitted from peripheral receptors to specific areas of the brain for interpretation.

Puberty

A phase of human development during which a child transitions into an adult, marked by physical changes that enable reproduction.