Which of the Following Parties Is Likely to Have the Most

question 46

Multiple Choice

Which of the following parties is likely to have the most information about the health of an individual who is trying to purchase a health insurance policy?

• A)The company that issues the health insurance policy
• B)The individual who is applying for the health insurance policy
• C)The employer of the individual who is trying to purchase the health insurance policy
• D)All parties in the health insurance market have access to the same level of information.

---

Definitions:

Exercise Price

The price at which the holder of an option can buy or sell the underlying security.

European Calls

Options contracts that allow the buyer to purchase a stock or asset at a specific price on or before the expiration date, but only on that date.

Expiration Date

The final date by which an option or other financial instrument must be exercised or becomes void.

Call Option

An agreement that grants the purchaser the flexibility, without the necessity, to acquire a stock, bond, commodity, or different asset at an agreed price during a definite timeframe.