Which Statement Describes a Principle of the Insurance Industry

question 67

Multiple Choice

Which statement describes a principle of the insurance industry?

• A)Trade in risk can produce mutual gains.
• B)Diversification can increase risk.
• C)Deductibles add to the problem of moral hazard.
• D)Adverse selection should be used to reduce insurance costs.

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Definitions:

360-Degree Feedback

A performance appraisal method where an employee receives confidential, anonymous feedback from the people who work around them.

Achievement Motivation

The drive to pursue and attain goals; an individual's persistent effort to succeed and meet standards of excellence.

Desire for Control

The motivation to influence or regulate one's environment or the outcomes of various aspects of one's life.

High Standard

The level of quality or excellence that is expected or required from a task or behavior.