​The Following Is an Example of Adverse Selection

question 76

Multiple Choice

​The following is an example of adverse selection

• A)​A majority of those applying for well paid jobs are under qualified
• B)More reckless drivers opt for cars with fewer safety devices
• C)Individuals living in less secure neighborhoods want to buy less insurance
• D)​Individuals with a strong family history of heart diseases opt to buy less insurance

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Definitions:

Income Statement

A financial document that reports a company's financial performance over a specific period, detailing revenues, expenses, and net income.

Statement of Cash Flows

An account that explains how fluctuations in balance sheet items and earnings impact cash and its equivalents, divided into sections for operating, investment, and financial activities.

Cash Dividend Payments

Cash dividend payments are distributions of a company's earnings to its shareholders as decided by the company's board of directors.

Income From Operations

Income from operations is a measure of the profitability of a company's core business activities, excluding non-operating income and expenses.