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Question
Insurance companies have to deal with the concept of adverse selection, which isa. the practice of low-risk insured seeking low premiums.
b. high-risk persons are more likely to purchase insurance.
c. insureds are likely to increase their risky behavior.
d. Insurance salespersons try to sell their most profitable policies.
Answer
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Related questions
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In recent years, know-your-clients (KYC) is required by international financial regulators. In the U.S., what is the act that requires financial institutions to share information about customer identities with appropriate government agencies?
a. The USA Patriot Act
b. The Sarbanes-Oxley Act
c. The 9/11 Act
d. The U.S. Treasury Department Act
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Moral hazard incentives for undesirable manager behavior may have been created by
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Financial institutions are regulated for the following reason(s):
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Bailout of large banks by federal regulators is an example of market discipline.
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Banks are regulated in part to protect the nation's money supply, much of which is a liability of the banking industry.
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A "too big to fail" policy encourages small banks to take higher risks.
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The Office of the Comptroller of the Currency (OCC) is the oldest bank regulatory agency.
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A foreign branch office of a U.S. bank is regulated by
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b. the host country bank regulation.
c. the FDIC.
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e. both a and b
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All of the following are techniques reducing credit risk in international lending except
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Which of the following is associated with the currency risk of international lending by a U.S. bank?
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a. Edge Act banks
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If a hedge fund manager focused on short-selling of stocks, he/she would
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b. invest in companies with high future growth prospects.
c. borrow money to invest in stocks.
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Mutual fund managers can keep their cash balances low by all but one of the following:
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