People with a Bad Driving Record Find It Difficult to Buy

question 124

Multiple Choice

People with a bad driving record find it difficult to buy automobile insurance because insurance companies fear that ___________ may happen if they raise the premiums.

• A) adverse selection
• B) moral hazard
• C) risk aversion
• D) none of the statements associated with this question are correct

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Definitions:

Budgetary Slack

The practice of underestimating revenues or overestimating costs when preparing a budget, to create a buffer that makes budget targets easier to achieve.

Revenue Projection

An estimate of the future sales and income generated by a company during a specific period, often used in budgeting and planning.

Quarterly Production Budget

A financial plan that outlines the expected production costs and output levels for a business over a three-month period.

Platinum

A precious metal with significant industrial and jewelry uses, known for its durability, rarity, and high melting point.