Which of the following statements about adverse selection is most correct? A Adverse selection means those...
Which of the following statements about adverse selection is most correct?
| A | Adverse selection means those individuals with greater health risk are more likely to purchase health insurance. |
| B | The adverse selection problem exists because of asymmetric information (applicants have better knowledge of their health status than insurers). |
| C | Historically, underwriting provisions were used to minimize the adverse selection problem. |
| D | Statements a. and b. are both correct. |
| E | Statements a., b., and c. are all correct. |
Homework Answers
Option.E) Statements a,b,and c. are all correct
The following statements about adverse selection is most correct
Adverse selection means those individuals with greater health risk are more likely to purchase health insurance.
The adverse selection problem exists because of asymmetric information (applicants have better knowledge of their health status than insurers).
Historically, underwriting provisions were used to minimize the adverse selection problem.
Thanks
Add Answer to:
Which of the following statements about adverse selection is
most correct?
A
Adverse selection means those...
Health insurers face the problem of adverse selection. Define adverse selection in the context of the...
Health insurers face the problem of adverse selection. Define adverse selection in the context of the health insurance market. Explain the consequences of adverse selection on health insurance premiums (consider the expected utility/risk aversion model). What measures have health insurers historically taken to minimize the effects of adverse selection? What restrictions do the ACA reforms place on the ability of insurers to avoid adverse selection? What are the likely consequences on health insurance premiums? Can I have 2 page summary
Health insurers face the problem of adverse selection. Define adverse selection in the context of the health insurance m...
Health insurers face the problem of adverse selection. Define adverse selection in the context of the health insurance market. Explain the consequences of adverse selection on health insurance premiums (consider the expected utility/risk aversion model). What measures have health insurers historically taken to minimize the effects of adverse selection? What restrictions do the ACA reforms place on the ability of insurers to avoid adverse selection? What are the likely consequences on health insurance premiums?
All of the following statements regarding insurance policies are correct EXCEPT: A) Adverse selection is the...
All of the following statements regarding insurance policies are correct EXCEPT: A) Adverse selection is the tendency of those that most need insurance to purchase insurance policies while those with the least perceived risk are less likely to pay the necessary premiums for insurance. B) An endorsement is a modification or change to a life or health insurance policy. C) Co-payments are loss-sharing arrangements whereby the insured pays a flat dollar amount or percentage of the loss in excess of...
1. Which of the following statements concerning insurance underwriting is (are) correct? I. Underwriting is the...
1. Which of the following statements concerning insurance underwriting is (are) correct? I. Underwriting is the selection and pricing of insurance applications that are offered to an insurer. II. Underwriting attempts to avoid adverse selection by individuals who purchase insurance. A I only B. II only C. Both I and II D. Neither I nor II 2. Which of the following statements concerning modified endowment contracts (MECs) is (are) correct? I. Any policy that is paid up prior to age...
72) In the market for automobile insurance, adverse selection implies that A) those who are insured...
72) In the market for automobile insurance, adverse selection implies that A) those who are insured might take greater risks. B) insured and uninsured alike will take greater risks. C) those who are uninsured might take greater risks. D) drivers with greater risks are more likely to buy insurance. 73) Product differentiation A) means that the monopolistic competitor's product is a close but not a perfect substitute for the products of its competitors. B) is why a monopolistic competitor faces...
55. The earliest form of insurance was insurance. (a) life (b) health (c) automobile (d) property...
55. The earliest form of insurance was insurance. (a) life (b) health (c) automobile (d) property and casualty 56. The problem of occurs when those most likely to get large insurance payoffs are the ones who want to purchase insurance the most. (a) asymmetric information (b) moral hazard (c) adverse selection (d) fraudulent behavior 57. To prevent adverse selection, health and life insurance companies may do all the following except (a) charge higher premiums to people with certain pre- existing...
Which of the following statements does not play a direct role in natural selection? Read all...
Which of the following statements does not play a direct role in natural selection? Read all choices before answering the question. a) Artificial selection. b) Individuals within the population, who have the greatest reproductive fitness, are those who produce the greatest number of offspring, who survive to reproduce the subsequent F2 ("grandkids") generation. c) A species will produce more offspring than environmental resources can support. Consequently, not all individuals survive and there is a competition for limited resources. d) Competition...
Text questions Which of the following statements about tax collection is correct? Choose one: a. Vertical equity means...
Text questions Which of the following statements about tax collection is correct? Choose one: a. Vertical equity means that everyone should pay the same amount of tax in ISK. b. A regressive tax means that those with the highest incomes pay proportionally the lowest tax. c. The Laffer curve shows that tax revenue will always continue to grow as the tax collection rate grows. d. Progressive tax means that those with the highest income pay proportionally the lowest tax. e....
9. Which of the following statements is (are) correct? (x) Insurance companies protect individuals and corporations...
9. Which of the following statements is (are) correct? (x) Insurance companies protect individuals and corporations (policyholders) from financially adverse events. (y) Securities firms and investment banks underwrite securities and engage in related activities such as securities brokerage, securities trading, and making markets in which securities trade (z) Mutual funds pool many individuals’ and companies’ financial resources and invest those resources in diversified asset portfolios. A. (x), (y) and (z) B. (x) and (y) only C. (x) and (z) only...
All the following statements concerning the selection of a trustee are correct EXCEPT A. Individual trustees...
All the following statements concerning the selection of a trustee are correct EXCEPT A. Individual trustees are not audited and consistently checked to the same degree as corporate fiduciaries. B. If a beneficiary is also named as trustee, there is the opportunity to have greater flexibility in a trust as well as the most favorable tax consequences. C. If a family member is selected as trustee, he or she is often placed in an uncomfortable, and perhaps untenable, position. D....
55. The earliest form of insurance was insurance. (a) life (b) health (c) automobile (d) property and casualty 56. The problem of occurs when those most likely to get large insurance payoffs are the ones who want to purchase insurance the most. (a) asymmetric information (b) moral hazard (c) adverse selection (d) fraudulent behavior 57. To prevent adverse selection, health and life insurance companies may do all the following except (a) charge higher premiums to people with certain pre- existing...
Which of the following statements does not play a direct role in natural selection? Read all choices before answering the question. a) Artificial selection. b) Individuals within the population, who have the greatest reproductive fitness, are those who produce the greatest number of offspring, who survive to reproduce the subsequent F2 ("grandkids") generation. c) A species will produce more offspring than environmental resources can support. Consequently, not all individuals survive and there is a competition for limited resources. d) Competition...
Text questions Which of the following statements about tax collection is correct? Choose one: a. Vertical equity means that everyone should pay the same amount of tax in ISK. b. A regressive tax means that those with the highest incomes pay proportionally the lowest tax. c. The Laffer curve shows that tax revenue will always continue to grow as the tax collection rate grows. d. Progressive tax means that those with the highest income pay proportionally the lowest tax. e....
Most questions answered within 3 hours.
-
Write an assessment of the current business analysis of Hilton
Worldwide using Porters 5 Forces analysis.
asked 6 minutes ago -
i need help on this
Chapter 9 Section 3 Question 1:
Rudy puts this poster, with...
asked 14 minutes ago -
True or false Assembly x86
41. _____ The program counter is a pointer to the
instruction....
asked 15 minutes ago -
You have conducted an experiment to try to demonstrate that
growth factor receptor X protein (GFRX)...
asked 30 minutes ago -
The Gross Profit ratio for 2014 is 57.07%
Assume that Campbell's net sales for the first...
asked 30 minutes ago -
Thoroughly discuss the various current and proposed solutions to
anthropogenic influences resulting in Global Climate Change....
asked 34 minutes ago -
BLOG EXERCISE: You are writing a weekly intranet blog for the
CEO of a large Canadian...
asked 37 minutes ago -
calculate ΔGrxn at 36 ∘C. N2O4(g)→2NO2(g)
asked 37 minutes ago -
Present and Future Values of Single Cash Flows for Different
Periods
Find the following values, using...
asked 40 minutes ago -
Which types of mutations in DNA can lead to the translation of a
non-functional protein product?...
asked 39 minutes ago -
Many structures are composed of individual elements that react
in unison when forces are applied. the...
asked 41 minutes ago -
Work of 1950 J is done by stirring a perfectly insulated beaker
containing 75 g of...
asked 1 hour ago