A mechanism for reallocating risk is:
A. diversification.
B. dividend pooling.
C. risk premiums.
D. All of these are mechanisms for reallocating risk.
Answer: A
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You have two options for how to spend the afternoon. You can either go see a movie with your roommate or work as a tutor for the Math Department. From experience, you know that going to see a movie gives you $20 worth of enjoyment, and with your student discount, a movie ticket only costs $12. If you spend the afternoon working as a math tutor, you will get paid $45. On a typical day, you wouldn't be willing to spend the afternoon working as a math tutor for less than $35. What is your opportunity cost of seeing a movie this afternoon?
A. $22 B. $8 C. $57 D. $12
When accounting profits are negative, economic profits could be:
A. positive. B. negative. C. zero. D. All of these are possible.
A formula for determining how much a bank can extend loans through the creation of check able deposits is
a. excess reserves/the reserve requirement. b. excess reserves ? the reserve requirement. c. excess reserves + the reserve requirement. d. reserve requirement/excess reserves.
Which group of policies aims at extracting all consumer surplus?
A. Price matching and randomized pricing. B. Price discrimination and peak load pricing. C. two-part pricing and block pricing. D. Cross-subsidization and brand loyalty.