A risk that affects only individuals or small groups and not the entire economy is called a
A) diversifiable risk.
B) pure risk.
C) speculative risk.
D) nondiversifiable risk.
Question 2
ABC Insurance Company sells auto insurance in one state. Recently, the state legislature passed a law that limits the use of an individual's credit history by insurers when selecting applicants to insure.
This change in law will increase the possibility of unprofitable results for ABC. This type of hazard is an example of
A) physical hazard.
B) legal hazard.
C) moral hazard.
D) attitudinal hazard.
