Which of the Following Can Be Avoided by Using Experience

question 3

Multiple Choice

Which of the following can be avoided by using experience ratings? (Cost Advantage)

• A)Adverse selection
• B)Medical underwriting
• C)Economies of sales
• D)Insurance pooling

Understand and apply the concept of internal rate of return (IRR) for investment decision-making.

Calculate and interpret the net present value (NPV) of a capital budgeting project, incorporating factors such as cash inflows and outflows, salvage value, and working capital.

Assess the financial attractiveness of an investment based on its ability to increase sales revenues and reduce operating costs.

Evaluate investment projects using profitability index ranking method.

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Definitions:

Internationally Recognized States

Countries that are acknowledged by a majority of other nations as sovereign entities with a defined territory, permanent population, governing body, and the capacity to engage in relations with other states.

Rule Of Law

The principle that all members of a society, including those in government, are equally subject to publicly disclosed legal codes and processes.

Rule Of Custom

A principle where social norms and behaviors are guided by longstanding traditions and customs rather than codified laws.

Overt Coercion

The use of clear and open force or pressure to make someone do something against their will.