Solved

Which of the Following Actions Best Illustrates Moral Hazard

Question 115

Multiple Choice

Which of the following actions best illustrates moral hazard?


A) A person adds risky stock to his portfolio.
B) A person who has narrowly avoided many accidents applies for automobile insurance.
C) A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
D) A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q110: Figure 27-2.The figure shows a utility function

Q111: Figure 27-2.The figure shows a utility function

Q112: Angela reads financial advice columns and concludes

Q113: Figure 27-2.The figure shows a utility function

Q114: Suppose that Albert can buy a bond

Q116: Other things the same,as the number of

Q117: Recently,Lisa's wealth increased by $500.If her wealth

Q118: Diversification of a portfolio<br>A)can eliminate market risk,but

Q119: Figure 27-3<br>The following figure shows the utility

Q120: Which of the following make(s)insurance premiums higher