After Hurricane Katrina,there Was Considerable Public Outrage That Many of the Properties

question 80

Multiple Choice

After Hurricane Katrina,there was considerable public outrage that many of the properties were not insured against flooding although they were insured against wind damage.What might explain these different approaches to insurance?

• A) The risk of wind damage is potentially diversifiable, but the risk of flooding is not.
• B) The risk of flood damage is potentially diversifiable, but the risk of wind damage is not.
• C) predatory insurance policies
• D) Neither the risk of wind damage nor the risk of flooding is diversifiable.

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Definitions:

Product Differentiation

The method of making a product or service stand out from the competition in order to appeal more to a specific target group.

Narrow Market

A market segment characterized by a specific and often limited customer base, interests, or area of focus.

Cost Leadership

A competitive strategy where a company aims to become the lowest-cost producer in its industry or market.

Labor Specialization

The process of dividing work into unique tasks performed by different individuals, improving efficiency and expertise.