Risk Diversification Refers to the Process by Which

question 10

Multiple Choice

Risk diversification refers to the process by which:

• A)risks are shared across many different assets or people,reducing the impact of any particular risk on any one individual.
• B)people organize themselves in a group to collectively absorb the cost of the risk faced by each individual.
• C)insurance companies change the risk aversion of their clients.
• D)insurance companies reallocate the likelihood of catastrophes happening.

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Definitions:

Neuroticism-Emotional Instability

A personality trait characterized by a long-term tendency to experience negative emotions such as anxiety, anger, or depression more easily.

Middle Adulthood

A stage of life that generally encompasses the ages between 40 to 65, characterized by increased focus on personal and professional achievement, stability, and the awareness of aging.

Later Adulthood

A stage in human development often defined as beginning around the age of 65, characterized by continued growth, adaptation, and change in various aspects of life.

Career Changes

The act of moving from one job or career path to another, which may involve acquiring new skills or reevaluating personal goals.