Insurance for Large Risks That Cannot Be Well Diversified Has

question 110

Multiple Choice

Insurance for large risks that cannot be well diversified has a(n) ________,which increases its cost.

• A)positive beta
• B)moral hazard clause
• C)negative beta
• D)actuarially-biased risk
• E)zero beta

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Definitions:

M'Naghten Rule

A legal doctrine that defines the insanity defense by assessing whether a defendant was capable of understanding the nature of their actions or distinguishing right from wrong at the time of the crime.

Insane

A term traditionally used to describe a person suffering from mental illness or demonstrating extreme irrational behavior, though it is considered outdated and insensitive in modern clinical contexts.

Psychological Disorder

A pattern of behavioral, cognitive, or emotional symptoms that cause significant distress or impairment in functioning.

Psychological Disorders

Mental disorders characterized by persistent patterns of behavior, thought, or emotions that are dysfunctional or distressing to the individual.