Is There a Reason Why Pure Risk Events, Like a Hurricane

question 40

Multiple Choice

Is there a reason why pure risk events, like a hurricane or earthquake, could be bundled into a more general risk portfolio?

• A) No, pure risks have too devastating an effect.
• B) Yes, since they are negatively correlated with other risk events.
• C) No, they are too highly correlated with other risk events.
• D) Yes, because an insurer can ask a very high premium for including it in the general risk portfolio.

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Definitions:

Social Cohesion

The bonds that bring people together and create a sense of belonging in society, characterized by strong relationships, trust, and cooperation among members.

Functionalists

Scholars or theorists who view society as a complex system whose parts work together to promote solidarity and stability.

Deviance

Behaviors or actions that violate societal norms and expectations.

Violent Crime

Acts of crime that involve violence or the threat of violence against others.