_______ occurs when high-risk individuals subscribe to an insured group of low-risk individuals.

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Adverse selection occurs when high-risk individuals are more likely to participate in insurance plans compared to low-risk individuals, resulting in higher claims and higher premiums for the insurance company. This can be a consequence of asymmetric information where the high-risk individuals have better knowledge about their likelihood of making a claim compared to the insurance company.

_______ Occurs When High-Risk Individuals Subscribe to an Insured Group