- CFA Exams
- CFA Level I Exam
- Topic 5. Equity Investments
- Learning Module 1. Market Organization and Structure
- Subject 3. Financial Intermediaries
CFA Practice Question
When only those who are most at risk buy insurance so that insured losses tend to be greater than average, ______ occurs.
B. moral hazard
C. adverse selection
A. fraud
B. moral hazard
C. adverse selection
Correct Answer: C
User Contributed Comments 2
| User | Comment |
|---|---|
| jonan203 | if only more people understood this concept. |
| jasonkwk | adverse selection: information asymmetry occurs |