Matty and Rudy Are the Same Age,live in the Same

question 59

Multiple Choice

Matty and Rudy are the same age,live in the same town,and hold similar jobs a similar distance from their respective homes.They are so similar,in fact,that to the insurance company,they look the same and are offered the same insurance options.However,Matty has never been a particularly good driver and so buys a lot of auto insurance.Rudy,on the other hand,takes pride in being an excellent driver and so only carries the minimum insurance required.This is an example of:

• A)adverse selection.
• B)risk pooling.
• C)risk aversion.
• D)diversification.

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Definitions:

Competitive Advantage

The attribute(s) that allows a company to outperform its competitors, providing it with a greater market share or profitability.

Sustainable

The quality of not being harmful to the environment or depleting natural resources, and thereby supporting long-term ecological balance.

Benefit

Part of an employee’s compensation in addition to wages and salaries.

Competitive Advantage

The attribute that allows an organization to outperform its competition, achieved through offering higher value to consumers or producing goods or services at a lower cost.