Asked by Krystina Marschall on Jun 04, 2024
Verified
Which firm is not dealing with adverse selection
A) a manufacturer requires a 90 day probationary period for new employees
B) a temporary clerical agency requires a typing test
C) a manufacturer contracts with suppliers regardless of ISO 9000 status
D) Smokers get the worse life insurance rates as non-smokers
Adverse Selection
A situation in which sellers have information that buyers do not have, or vice versa, affecting the quality of goods or services offered.
Probationary Period
A trial period at the beginning of employment during which an employer can evaluate an employee’s performance and fit with the company.
ISO 9000
A set of international standards for quality management and quality assurance designed to help companies ensure they meet customer and other stakeholder needs.
- Acknowledge the concept of adverse selection and its importance for the insurance market.
- Distinguish between high risk and low risk clients and their treatment in the insurance market.
Verified Answer
Learning Objectives
- Acknowledge the concept of adverse selection and its importance for the insurance market.
- Distinguish between high risk and low risk clients and their treatment in the insurance market.
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