Questions
Single choice
Which of the following concepts is MOST consistent with a situation in which an individual takes out insurance for their home and contents, and then fails to take adequate security precautions (such as locking their door when they leave the premises) because they know they are insured for any losses:
Options
A.Risk management
B.Asymmetric information
C.Moral hazard
D.Adverse selection
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Step-by-Step Analysis
The question asks which concept best fits a scenario where someone buys home and contents insurance and then reduces precautionary behavior, such as not locking the door, because they expect insurance to cover losses.
Option 1: Risk management. This term refers to the overall process of identifying, assessing, and mitigating risks to minimize their impact. While relevant to the broad topic of prote......Login to view full explanationLog in for full answers
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