Which of the Following Actions Best Illustrates Adverse Selection

question 76

Multiple Choice

Which of the following actions best illustrates adverse selection?

• A)A person adds risky stock to his portfolio.
• B)A person who has narrowly avoided many accidents applies for automobile insurance.
• C)A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
• D)A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.

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Definitions:

Output

The result or effect of a process, often referring to the signals or data sent by a system to actuate devices or display information.

Coil Symbols

In ladder logic or electrical schematics, coil symbols represent the output of a circuit and are controlled by the preceding contacts.

Internal Control Relay

A virtual relay used within a PLC program to perform logic operations without physical hardware.

Output Field Device

Output field devices are components in a control system that receive signals from a controller to perform actions, such as actuators, valves, or lights, translating control signals into physical operations.