9.1 Insurance: What it is and Why you need it

For nearly all young adults working, their greatest asset is:

• human capital

• social capital

• an employer retirement plan

• student loan debt

How can Armand increase his human capital?

• go back to college for additional traning

• go back to college or engage in healthy behavior

• engage in healthy behavior

• diversify his investment portfolio

The frequency of being involved in an automobile accident while texting is:

• high

• low

• somewhere between low and medium

• impossible to determine, which explains why insurance premiums are so high

Blakely and Marty have been dating 3 years. Marty is interested in going sky diving. Marty's tolerance for extreme activities is very high. Blakely's risk tolerance is a lot lower. When discussing the activity, Marty tells Blakely that they will be in a secure plane and that the parachutes they will use have been hand-packed and checked by three people. In the end, Marty makes the jump but Blakely does not.

Blakely's risk control strategy was to:

• transfer the risk

• manage the risk

• avoid the risk

• minimize the risk

Blakely and Marty have been dating 3 years. Marty is interested in going sky diving. Marty's tolerance for extreme activities is very high. Blakely's risk tolerance is a lot lower. When discussing the activity, Marty tells Blakely that they will be in a secure plane and that the parachutes they will use have been hand-packed and checked by three people. In the end, Marty makes the jump but Blakely does not.

Marty's risk control strategy involved:

• transferring the risk

• managing the risk

• avoiding the risk

• eliminating the risk

A problem with living an unhealthy lifestyle is that the:

• severity of future risks increases over time

• frequency of future risks increase over time

• ability to transfer risks increases over time

• severity and frequency of future risks increases over time

Living a healthy lifestyle and engaging in healthy behaviors are examples of all the following risk-management strategies, EXCEPT:

• avoidance

• transference

• retention

• management

The number-one determinant of someone's health is ____ followed by ____

• social circumstances; environment exposures

• genetic disposition; medical care

• medical care; health behavior

• health behavior; genetic disposition

Maintaining good health requires someone to:

• eat right

• exercise

• get enough sleep

• eat right, exercise, and get enough sleep

If Nicole buys health insurance, she is effectively:

• transferring the risk of high-health related expenses to an insurance company

• accepting the risks associated with major medical expenses

• retaining the costs associated with health risks

• avoiding the fact that she might become ill in the future