The ability of insurance to spread risk is limited by a. risk aversion and moral hazard. b.
Question:
The ability of insurance to spread risk is limited by
a. risk aversion and moral hazard.
b. risk aversion and adverse selection.
c. moral hazard and adverse selection.
d. risk aversion only.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 100% (4 reviews)
The correct answer is c moral hazard and adverse selection Insurance is a financial mechanism that h...View the full answer
Answered By
Dorcas Juliet
I am a proficient tutor and writer with over 4 years experience, I can deliver A+ works in all fields related to business and economics subject. Kindly hire me for excellent papers
4.70+
10+ Reviews
51+ Question Solved
Related Book For
Question Posted:
Students also viewed these Business questions
-
Which type of factors are considered when assessing if there is an indication that an asset may be impaired? Both internal and external factors External factors only Neither internal nor external...
-
Multiple Choice Questions 1. If the interest rate is zero, then $100 to be paid in 10 years has a present value that is a. Less than $100. b. Exactly $100. c. More than $100. d. Indeterminate. 2. If...
-
Moral Hazard versus Adverse Selection in Health Care Reform: We mentioned moral hazard only brieflyand primarily in the context of how this might aggravate the adverse selection problem. In this...
-
In Problem 10.16, we projected financial statements for Walmart Stores for Years +1 through +5. The data in Chapter 12s Exhibits 12.1612.18 include the actual amounts for 2008 and the projected...
-
Population estimates show that the equation P=300+10t-t2 represents the size of the graduating class of a high school, where t represents the number of years after 2015, 0 t 10. What will be the...
-
Mid-South Auto Leasing leases vehicles to consumers. The attraction to customers is that the company can offer competitive prices due to volume buying and requires an interest rate implicit in the...
-
If the guest had a credit balance in his account at the time of checkout, it has to be refunded to the guest through a __________
-
1. How would you explain the Guinness pricing strategy and the underlying assumptions about consumer behaviour when Diageo reports for 2005 that in the UK and Ireland the Guinness sales volume fell...
-
Question 2 10 pts Evco Inc. has to choose between issuing 200,000 shares of common stock at $10 per share or issuing $2,000,000 worth of bonds at 6% interest. Income before interest and taxes is...
-
The benefit of diversification when constructing a portfolio is that it can eliminate a. adverse selection. b. risk aversion. c. firm-specific risk. d. market risk.
-
If the interest rate is 10 percent, then the present value of $100 to be paid in 2 years is a. $80. b. $83. c. $120. d. $121.
-
Describe the ways in which intelligence is measured, and comment on the controversy over its measurement.
-
Use the Comprehensive Annual Financial Report for the Village of Arlington Heights (please look up this content) for the year ended December 31, 2018, to answer questions 8-20. All questions are on...
-
The pulse rates of 152 randomly selected adult males vary from a low of 37 bpm to a high of 117 bpm. Find the minimum sample size required to estimate the mean pulse rate of adult males. Assume that...
-
Two wires lie perpendicular to the plane of the screen and carry equal magnitudes of electric current in the directions shown. Point P is equidistant from the two wires. The distance between each of...
-
Your firm has recently been appointed as auditors of Kentronics Ltd , a large company which markets sophisticated electronic equipment for heavy industry as well as the mining equipment industry. The...
-
The pulse rates of 152 randomly selected adult males vary from a low of 37 bpm to a high of 117 bpm. Find the minimum sample size required to estimate the mean pulse rate of adult males. Assume that...
-
Using the chart of accounts for Dr. Kuhl from Problem 11A-1, record the following transactions in the synoptic journal and then prove the journal: 2012 May Dr. Kuhl deposited $9,000 in the practice....
-
An educational researcher devised a wooden toy assembly project to test learning in 6-year-olds. The time in seconds to assemble the project was noted, and the toy was disassembled out of the childs...
-
Consider two of the income security programs in the United States: Temporary Assistance for Needy Families (TANF) and the Earned Income Tax Credit (EITC). a. When a woman with children and very low...
-
In the spring of 2010, President Barack Obama signed sweeping healthcare legislation with the aim of providing healthcare to most Americans, financed in part by increasing taxes on those with high...
-
A monopolist knows that in order to expand the quantity of output it produces from 8 to 9 units it must lower the price of its output from $2 to $1. Calculate the quantity effect and the price...
-
Arnold inc. is considering a proposal to manufacture high end protein bars used as food supplements by body builders. The project requires an upfront investment into equipment of $1.4 million. This...
-
Billy Bob bank has three assets. It has $83 million invested in consumer loans with a 3-year duration, $46 million invested in T-Bonds with a 12-year duration, and $69 million in 6-month (0.5 years)...
-
Ventaz Corp manufactures small windows for back yard sheds. Historically, its demand has ranged from 30 to 50 windows per day with an average of 4646. Alex is one of the production workers and he...
Study smarter with the SolutionInn App