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3. A risk that affects only individuals or small groups, and not the entire economy, is called a a. nondiversifiable risk. b. pure risk c.
3. A risk that affects only individuals or small groups, and not the entire economy, is called a a. nondiversifiable risk. b. pure risk c. speculative risk. d. diversifiable risk. e. subjective risk. 4. In Chapter 3, we considered which risk management technique to use based on loss frequency and loss severity. According to our 2x2 matrix, which risk treatment measure should be applied to loss exposures that have a low-frequency and a high severity? a. risk avoidance b. risk control c. risk retention d. risk transfer
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