In an Efficient Allocation of Risk

question 176

Multiple Choice

In an efficient allocation of risk:

• A)all risk is eliminated.
• B)those who are most willing to bear risk,bear it.
• C)all risk is diversified.
• D)all insurance premiums are equal to the expected value of the claims.

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Definitions:

Standard Costs

Predetermined costs assigned to goods and services, used as a benchmark for evaluating actual production costs.

Efficiency

The degree to which a process uses resources optimally to achieve a desired outcome.

Standards

Established norms or criteria in various fields that act as a basis for comparison or compliance.

Performance Goals

Specific objectives set for employees or departments, aimed at improving productivity and measuring success through quantifiable benchmarks.