4. Identify the approaches that insurers can use to deal with the problem of catastrophic loss exposures. 4b. Why are most market risks, financial risks, production risks, and political risks considered difficult to insure by private insurers? 5. a. What is the meaning of adverse selection? b. Identify some methods that insurers use to control for adverse selection. 6. a. Identify the sources of information that a risk manager can use to identify loss exposures. b. What is the difference between the maximum possible loss and probable maximum loss? 7. a. Explain the meaning of risk control. b. Explain the following risk-control techniques. 1. Avoidance 2. Loss prevention 3. Loss reduction 8. a. Explain the meaning of risk financing. b. Explain the following risk-financing techniques