Adverse Impact Refers to the Possibility That a Disproportionate Number

question 76

True/False

Adverse impact refers to the possibility that a disproportionate number of protect class members may be rejected using a given predictor.

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Definitions:

Adverse Selection

A situation in which one party in a transaction has more or better information than the other, often leading to an undesirable outcome.

Underpriced

Describes a situation where the price of a good or service is set below its market value or cost of production.

Bulletin Board

A surface intended for the posting of public messages, notices, or advertisements.

Moral Hazard

The situation where one party to an agreement can take risks because they know they will not have to bear the full consequences of their actions.