Exhibit 14.8 The Following Questions Use the Information Below

question 33

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-Every nonprobabilistic method has a weakness for decision making. Which of the following is incorrect regarding a method and its weakness?

• A) The maximax method ignores potentially large losses.
• B) The maximin method ignores potentially large payoffs.
• C) The minimax regret method can lead to inconsistent decisions.
• D) All of these are correct.

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Definitions:

Assumption of the Risk

A legal theory in personal injury cases where the plaintiff is considered to have voluntarily accepted a known risk associated with an activity or condition, possibly limiting the defendant's liability.

Comparative Negligence

A principle of tort law that compares the negligence of the conflicting parties and apportions damages accordingly.

Res Ipsa Loquitur

A Latin term that means "the thing speaks for itself," used in tort law to refer to cases where the negligence is inferred from the nature of the accident.

Actual Cause

The true reason an event occurred, which directly led to the damage or injury, forming a basis for establishing legal liability.