PrepTest 53, Section 2, Question 12

Difficulty:

Melinda: Hazard insurance decreases an individual's risk by judiciously spreading the risk among many policyholders.

Jack: I disagree. It makes sense for me to buy fire insurance for my house, but I don't see how doing so lessens the chances that my house will burn down.

Melinda: Hazard insurance decreases an individual's risk by judiciously spreading the risk among many policyholders.

Jack: I disagree. It makes sense for me to buy fire insurance for my house, but I don't see how doing so lessens the chances that my house will burn down.

Melinda: Hazard insurance decreases an individual's risk by judiciously spreading the risk among many policyholders.

Question

Jack's response most clearly trades on an ambiguity in which one of the following expressions used by Melinda?

judiciously spreading

many policyholders

risk

decreases

hazard insurance

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