Which of the Following Actions Best Illustrates Adverse Selection

question 76

Multiple Choice

Which of the following actions best illustrates adverse selection?

• A)A person adds risky stock to his portfolio.
• B)A person who has narrowly avoided many accidents applies for automobile insurance.
• C)A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
• D)A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.

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Definitions:

Muscle Fibers

Long, slender cells that make up muscles, capable of contracting to produce movement in parts of the body.

Trained Muscle

Muscle that has undergone physiological changes due to exercise, enhancing its strength, endurance, or size.

Anaerobic Respiration

A form of respiration using electron acceptors other than oxygen, often occurring in muscle cells during intense exercise when oxygen is scarce.

Aerobic Respiration

A cellular process that uses oxygen to convert nutrients into energy.