The Two Big Problems Facing Insurance Companies in Trying to Manage

question 82

Multiple Choice

The two big problems facing insurance companies in trying to manage risk are:

• A)risk pooling and diversification.
• B)risk pooling and adverse selection.
• C)adverse selection and moral hazard.
• D)moral hazard and diversification.

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Definitions:

Influence Behavior

The ability to affect the actions, decisions, and thinking of others through persuasion, leadership, or social cues.

Corporate Culture

The shared values, beliefs, and practices that characterize an organization and influence its members' behaviors.

Unethical Behavior

Actions or practices that violate moral or professional guidelines, standards, or principles.

Bases of Power

Refers to the different ways in which individuals or groups can influence the behavior, opinions, or attitudes of others within an organizational context.