Which of the Following Actions Best Illustrates Adverse Selection

question 32

Multiple Choice

Which of the following actions best illustrates adverse selection?

• A)A person purposely chooses bonds of corporations with high default risk because of the high returns.
• B)A person dislikes losing $400 more than he likes winning $400.
• C)After obtaining automobile insurance a person drives less carefully than before.
• D)A person intending to take up dangerous hobbies applies for life insurance.

Identify the instruments and accounts used for savings and their features including certificates of deposit, money market accounts, and savings accounts.

Grasp the importance of security features in the physical design of money to protect against counterfeiting.

Understand the effects of inflation on money and its purchasing power.

Comprehend the penalties and terms associated with early withdrawal from savings instruments.

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Definitions:

Diverse Family Forms

Variations in family structures beyond the traditional nuclear family, including single-parent families, blended families, and same-sex parenting households.

Benefited

Received an advantage, gain, or improvement in condition or situation.

Economic Cooperation

Collaborative and coordinated efforts between various economic actors and organizations to achieve mutual or shared economic goals.

Emotional Support

The assistance provided through empathy, concern, and love to help a person handle stress or hardship.