Exam DISC-RM Practice Question 463
Study guide: Exam DISC-RM
After a fire destroys a neighboring warehouse, the owner of a similar warehouse feels much more at risk and asks for higher property limits. The insurer's data on warehouses of this construction and occupancy show no change in the probability of fire. Which statement describes the change?
- A) The owner's objective risk has risen, because a loss occurred nearby
- B) The owner's fire risk has become speculative rather than pure
- C) The owner's subjective risk has risen, while objective risk is unchanged
- D) The owner's fire risk has become nondiversifiable for the insurer
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