The Following Is an Example of Adverse Selection​

question 81

Multiple Choice

The following is an example of adverse selection​

• A)​A majority of those applying for well paid jobs are well 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 more insurance

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Definitions:

Chi-squared Test

A statistical hypothesis test used to determine whether there is a significant difference between expected frequencies and observed frequencies in one or more categories.

Nominal Data

A type of data that consists of names, labels, or categories without any implied order or ranking among them.

Technique

A specialized procedure or skill set used to accomplish a specific task effectively.

Nominal Data

A type of categorical data where categories are named labels without any intrinsic ordering.