Insurance premiums represent:
A) the expected value of the payout the company will give to individuals who are insured.
B) more than the expected value of the payout the company will give to individuals who are insured.
C) less than the expected value of the payout the company will give to individuals who are insured.
D) peace of mind and are unrelated to the expected value of the payout the company will give to individuals who are insured.
Correct Answer:
Verified
Q84: Diversification involves:
A) investing all your money in
Q85: Investing all your money in one company
Q86: Risk pooling:
A) assures the individuals that they
Q90: A mechanism for reallocating risk is:
A) risk
Q91: Risk pooling:
A)reallocates the likelihood of catastrophes happening.
B)reallocates
Q91: Insurance companies:
A) profit from the difference between
Q93: Insurance works because it:
A) reallocates the costs
Q97: In general, the amount people pay for
Q98: When risks are shared across many different
Q107: Which of the following entities can diversify
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