Which One of the Following Is False Concerning the Standardization

question 28

Multiple Choice

Which one of the following is false concerning the standardization of insurance policies?

• A) It reduces the risk for the insurance companies resulting from the principle of adhesion.
• B) It holds rates below what they would otherwise be.
• C) It reduces adverse selection.
• D) It increases flexibility.

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Definitions:

Race/Ethnicity

Categories used to describe groups of people with common ancestry, cultural history, or social affiliation.

Multicollinearity

A situation in regression analysis where two or more predictor variables are highly correlated, potentially leading to difficulties in estimating the relationship between variables and outcomes.

Correlation Matrix

A table showing correlation coefficients between sets of variables, used to understand relationships and dependencies among them.

Variables

Elements, features, or factors that are likely to vary or change among subjects in a study or model.