An Insurance Company Is Likely to Attract Customers Like Clancy

question 323

Multiple Choice

An insurance company is likely to attract customers like Clancy who want to purchase insurance because he knows better that the company that he is more likely to make a claim on a policy. What is the term used to describe the situation above?

• A) moral hazard
• B) adverse selection
• C) asymmetric information
• D) economic irrationality

Compute critical values and probabilities for standard and non-standard normal variables.

Understand and apply the concept of variance and standard deviation within the context of the normal distribution.

Critically analyze the assumptions and conditions for applying normal distribution models.

Calculate and interpret area under the curve of a normal distribution for specified intervals.

---

Definitions:

Temperament

The combination of innate traits that subconsciously influence a person's behavior and reactions to their environment.

Sociability

The inherent tendency to seek out or enjoy the company of others.

Emotionality

The capacity to experience and express emotions, which includes the ability to process and react to emotional stimuli in a given environment.

Basic Tendency

A core aspect of personality that reflects the inherent orientation or patterns of an individual, relatively stable over time.