QUESTION Suppose Pearce is at present in good health. Which factor most favors creating a health savings account (HSA) to ease the burden on the employee? A) Pearce at present does not have savings that would pay for a major medical emergency. B) HSA-eligible health plans typically have lower premiums. C) The HMO previously used […]
QUESTION Encryption alters readable data into an unreadable form to prevent unauthorized access. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Encryption uses mathematical algorithms to create complex coded messages that are difficult or almost impossible to break without the encryption key.
QUESTION Suppose Pearce has a pre-existing condition that requires regular treatment. Which factor makes creating a flexible savings account (FSA) a less attractive option for this employee? A) Not all the providers Pearce uses are comfortable with taking a spending account card in payment. B) Pearce now cannot use FSA funds for over-the-counter medications such […]
QUESTION Given that Lighthouse is a nonprofit organization of modest size, which of the following is the least feasible option for the employer? A) an onsite wellness healthcare clinic B) a major medical benefits program with a larger deductible C) a healthcare program using a point-of-service system D) using an external source to administer healthcare […]
QUESTION All of the following weaken the claim that PMI charges accurately reflect the risk of loan default EXCEPT: A) The cost of private mortgage insurance goes up as the size of a mortgage increases. B) Well-informed buyers can avoid paying PMI if they are aware of loan products that divide up their mortgages into […]
QUESTION Which of the following best supports the claim that charging PMI is fair to homebuyers? A) In some circumstances, PMI charges can be tax-deductible. B) Homebuyers who are charged PMI and are at risk of defaulting could typically pay for PMI by spending less on entertainment or luxury items. C) The risks of loan […]
QUESTION What are speculative risk and pure risk? What will be an ideal response? ANSWER Answer: Speculative risk involves a chance of either gain or loss. Pure risk involves a chance for either loss or no loss; there is no possibility of gain. Explanation: Speculative risk is the kind of risk that a company […]
QUESTION What is the difference between avoiding risk and reducing risk? What will be an ideal response? ANSWER Answer: Risk avoidance is the practice of avoiding risk by not participating in risky activity. Risk reduction is the practice of reducing risk by removing hazards or taking preventive measures. Explanation: Two additional ways that businesses […]
QUESTION What are self-insurance and risk transfer? What will be an ideal response? ANSWER Answer: Self-insurance is the practice in which a company sets aside money to cover losses with its own funds. Risk transfer is the practice whereby a company transfers its risk to an insurance company in return for a fee. Explanation: […]
QUESTION What is the difference between stock insurance companies and mutual insurance companies? What will be an ideal response? ANSWER Answer: Stock insurance companies are private insurers providing insurance to policyholders and earning profits for shareholders. Mutual insurance companies are nonprofit private insurers owned by their insurance policyholders, to whom they pay dividends or […]
