12. Jim borrows $500,000 to build a second home, an ocean-front vacation house. Jim loses his job during the recession. Jim burns down his vacation house, receives a loss payment from his fire insurer, and uses the payment from his insurer to pay off the loan. This is an example of the problem of... a. adverse selection b. physical hazard c. legal hazard d. moral hazard 13. When Steve Jobs, Apple's former CEO, announced he was retiring due to health reasons, the stock price of Apple decreased significantly. This announcement is an example of a loss exposure. a. property b. workers compensation c. liability d. personnel