Which of the following best describes the concept of "moral hazard" in insurance?a)The risk of a catastrophic event occurringb)The possibility of fraudulent claims being madec)The degree of uncertainty associated with a particular riskd)The tendency of insured parties to behave more recklessly or negligently

Moral hazard is an important concern of insurance arrangements because the existence ofinsuranceA) provides increased incentives for risk taking.B) is a hindrance to efficient risk taking.C) causes the private cost of the insured activity to increase.D) creates an adverse selection problem but no moral hazard problem

Moral Hazard only affects an organization when?Group of answer choicesIt doesn’t because everybody else does it too.Increased risky behavior is not taken into account by the risk manager.The risk manager has inadequate insurance.The board of directors or executives managers get caught.

Solutions to the moral hazard problem includeA) low net worth.B) monitoring and enforcement of restrictive covenants.C) greater reliance on equity contracts and less on debt contracts.D) greater reliance on debt contracts than financial intermediaries.

What is the ethical issue behind issuing disaster insurance?Question 15Select one:a.Catastrophic loss can be financially devastating.b.What constitutes a reasonable profit may be unfair.c.The guarantee of a fair payout is an inducement.d.Insurance premiums are calculated differentially.

Risk is defined as the Blank______.Multiple choice question.possibility of suffering harm or loss resulting from a given actionidentification, assessment, and prioritization of suffering harm from a given actionsubjective judgment people make about the characteristics and severity of suffering harm from a hazardprocess of identifying potential hazards and analyzing what could happen if a hazard occurs