Risk pooling:
A) reduces the chances of catastrophes happening.
B) lowers the costs of catastrophes when they occur.
C) allows individuals the peace of mind that they will never have to pay the full expense of a catastrophe if it hits them.
D) All of these statements are true.
Correct Answer:
Verified
Q90: A mechanism for reallocating risk is:
A) risk
Q91: Insurance companies:
A) profit from the difference between
Q93: Insurance works because it:
A) reallocates the costs
Q96: In general,people are willing to pay more
Q97: In general, the amount people pay for
Q97: A mechanism for reallocating risk is:
A) risk
Q98: When risks are shared across many different
Q98: Diversification involves:
A) investing all your money in
Q99: Risk diversification refers to the process by
Q100: Risk pooling occurs when:
A) people organize themselves
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