A Safe Driver Who Drives Faster as a Result of Purchasing

question 31

Multiple Choice

A safe driver who drives faster as a result of purchasing collision car insurance would be an example of the ________ problem.

• A) moral hazard
• B) adverse selection
• C) Texas hedge
• D) actuarial error

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Definitions:

Long Lived

Assets or properties owned by a company that are expected to provide economic benefits or value over an extended period, often exceeding one year.

Tangible

Relating to or representing things that have physical form and substance; can be touched or felt.

Cost Basis

The original value of an asset for tax purposes, typically the purchase price, adjusted for stock splits, dividends, and return of capital distributions, used to calculate capital gains or losses upon sale.

Appraisal Value

an estimated market value of an asset, typically determined by a professional appraiser based on condition, market trends, and other factors.