Adverse Selection Results in Which of the Following

question 30

Multiple Choice

Adverse selection results in which of the following?

• A) No underwriting is necessary.
• B) Applicants for insurance have a higher probability of loss than the average group of insureds.
• C) The federal government must write the insurance.
• D) Better insureds are attracted to the group.

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Definitions:

Industrially Advanced

Refers to countries or regions that have highly developed industries, technology, and infrastructure, contributing to a strong economy.

Comparative Advantage

A person's, corporation's, or country's capability to offer a good or service more efficiently, incurring less opportunity cost than their competitors.

International Trade

The exchange of goods and services between countries, allowing countries to expand their markets and pursue higher efficiency through specialization.

Relative Levels

An assessment of values or quantities in comparison to one another.