Adverse Selection Can Occur If

question 30

Multiple Choice

Adverse selection can occur if:

• A)high-risk persons insure themselves more heavily than low-risk persons.
• B)high-risk persons claim coverage which cannot be borne by the insurers.
• C)high-risk persons do not conceal information from the insurer.
• D)high-risk persons make an effort to take less risk in the presence of an insurance cover.

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Definitions:

Written Exam

A test administered on paper or on a computer, meant to assess knowledge, comprehension, and sometimes application skills in a specific area or subject.

Mental Rotation

The cognitive ability to rotate mental representations of two-dimensional and three-dimensional objects.

Belief Perseverance

The psychological phenomenon where individuals maintain their beliefs despite new evidence or facts that directly contradict them.

Confirmation Bias

Confirmation bias is the tendency to search for, interpret, favor, and recall information in a way that confirms one's preexisting beliefs or hypotheses.