Risk Diversification Refers to the Process by Which

question 92

Multiple Choice

Risk diversification refers to the process by which:

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

---

Definitions:

Developmental Trajectory

The course of development taken by an individual or group over time, often studied in psychological and educational contexts.

Emotional Sensitivity

An individual's heightened ability to perceive, feel, and respond to emotions in themselves or others.

Causal Link

A relationship where one event or action is understood to directly cause another.

General Paresis

A neurological disorder resulting from untreated syphilis, leading to progressive dementia and paralysis.