Which of the Following Statements Is INCORRECT About the Risks

question 6

Multiple Choice

Which of the following statements is INCORRECT about the risks that an insurer faces?

• A) Insurance businesses have been successful through the centuries because insurers are skillful in finding natural hedges.
• B) Insurance companies employ actuaries who calculate the likelihood of loss events and fair premiums for insuring risks.
• C) Actuaries cannot foretell whether any particular insured entity will suffer a loss,but they can estimate with reasonable accuracy the expected losses in a large population.
• D) Insurers try to manage risks by diversifying their losses across a large number of policyholders with the hope that the law of large numbers holds.
• E) Insurance companies often hedge their losses on catastrophic events by purchasing reinsurance.

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Definitions:

Self-care

The practice of taking action to preserve or improve one's own health and well-being, particularly during periods of stress.

Parentification

When a child acts more like a parent than a child. Parentification may occur if the actual parents do not act as caregivers, making a child feel responsible for the family.

Psychological Adaptation

The process by which individuals adjust their behavior, thoughts, or emotions to cope with changes in their environment or internal states.

Nonshared Environments

Refers to the unique factors and experiences that individuals have which differentiate them from others in their genetic family, contributing to differences in personality, preferences, and behavior.