Which of the Following Is an Example of "Pure Risk"?
Which of the following is an example of "pure risk"?
A)The risk associated with holding a portfolio of stocks and bonds
B)The risk associated with a bet on a horse race
C)The risk associated with a change in careers
D)The risk associated with fire and theft
When insureds engage in a pooling of risk,
A)each individual experiences an increase in his or her total risk.
B)the individual risk accompanying future uncertain events is decreased.
C)they can reduce the total losses of the insureds.
D)total premiums will be less than total losses.
Adverse risk selection occurs when
A)those with higher then average risk enter the risk pool.
B)insurance companies terminate insurance for individuals with higher than average risk.
C)the size of the risk pool decreases.
D)speculative risk increases.
If those who are in ill health purchase health insurance and this raises the premiums for all of the insureds,this would be an example of
A)a non-insurable interest.