In Determining Insurance Limits and Deductibles,an Important Concept Is That

question 21

Multiple Choice

In determining insurance limits and deductibles,an important concept is that insurance should be used to pay big losses rather than small losses.The objective is to insure big losses that could cause financial ruin and to exclude small losses that can be budgeted out of current income.This concept is called the

• A)law of large numbers.
• B)efficient loss-cost concept.
• C)large-loss principle.
• D)retention-transfer tradeoff.

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Definitions:

Blinding

A method in experimental design that prevents participants, experimenters, or both from knowing which intervention participants are receiving to reduce bias.

Average Prices

The mean amount of money required to purchase a particular set of goods or services.

Supermarket Chains

Companies that own or operate multiple supermarket stores across different locations.

Blocking Variable

A variable introduced in an experimental design to account for potential variation, thereby reducing confounding effects.