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- Indicate whether the statement is true or false, and justify your answer.In the model of insurance and uncertainty discussed in the chapter, an individual exhibits declining marginal utility of income if and only if she is risk-averse.What is the relationship between risk management and insurance buying and why do some argue that insurance buying exerts a negative influence on risk management today?One example of moral hazard in finance industry is "insurance policies often decreases incentive to take care of possession of its customers". How should people mitigate this problem?
- Which of the following is the main objective of P2P insurance O a. Less Fraudulent Claims O b. Discount in Premium or a Dividend O c. Shared Responsibility O d. No middlemenIn the context of the factors that can affect the tolerance for risk and investment choices, match each investor to the correct type of investment. * Conservative investments with less risk Speculative investments with higher risk Lower-income investors Younger investors People with no financial training or investment background Employees with secure employment positions Families with children Lower-income investors Younger investors People with no financial training or investment background Employees with secure employment positions Families with childrenDescribe a private insurance. what is it? Discuss the primary strengths and advantages, and weaknesses and disadvantages of the plan. how appealing is the plan to consumers? is it appealing to consumers?
- About Insurance, which one is wrong? a. insurance firms purchase re-insurance to reduce/alleviate/diversify the risk. b. Deposit insurance is used in commercial banking businesses. c. Underwriting and reinsurance risks are the major risks for insurance companies. d. Categorized as Life insurance and non-life (property/casualty, including medical) insurance. e. The US became a dominant insurer from modest roots planted in the 16th century.Which of the following statement is incorrect? The expected cost of risk per participant will stay the same through pooling arrangements as the number of participants increases, all other factors equal. A pooling arrangement result in reduced risk (standard deviation) to the participants in the pool when losses are negatively correlated. In the special case where losses are perfectly positively correlated across participants, risk can be virtually eliminated with a very large number of participants in a pooling arrangement. All the answers are correct. Insurance distribution costs may include mailing costs.Which of the following is not a Financial Intermediary? Select one: A. Commercial Banks B. Mutual Funds C. None of the given options D. Insurance Companies
- What does Ginnie Mae do? Select all that apply. A.Guarantees VA loans that allow no or 0% down payment so these loans can be sold on the secondary market.. B.Enforces the Truth in Lending Act C.Passed the Dodd Frank Wall Street Reform Act and Consumer Protection Act of 2010 D.Prevents discrimination and monitors lenders for discrimination against applicants in lending. E.Guarantees FHA loans that allow a low 3.5% down payment so that they can be sold on the secondary market.how do you expect the financing choices of the following firms to differ, explain the reasons for the differences A social enterprise versus a commercial enterprise. A highly innovative venture versus a firm that sells regular household consumables that is not innovative. A firm that has a high valuation over a firm that has a low valuation. (Note that the valuation classified as high or low is rated as such when compared to their industry counterparts).Which is Idemenity Plan and which is Managed Care Plan? Insureds create contract with an insurer who does not provide health care services The higher the deductible, the lower the premium Insured receive health care services from a designated group of providers May not even involve an insurance company No annual deduction is incurred, but a small co-payment may be required I most value the freedom of choice and am willing to pay for it. Cost is my most important consideration. I’d rather have the flexibility of either having the insurance company reimburse me or directly paying the health care provider.
