Market Failure in Insurance Markets Can Be Overcome If

question 92

Multiple Choice

Market failure in insurance markets can be overcome if

• A)if higher risk drivers promise to be safer
• B)if the government takes over the insurance market
• C)there is a signal that only low cost drivers can attain
• D)there is a signal that is very costly for high- risk drivers

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Definitions:

Corporate Insider

A person within an organization, typically an executive or employee, who has access to confidential or non-public information.

Short-swing Profits

Profits earned by corporate insiders from buying and selling their company's stock within a short timeframe, subject to specific legal regulations and reporting requirements.

Security

A financial instrument representing an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.

Securities Exchange Act

A U.S. law enacted in 1934 to govern the trading of securities, such as stocks and bonds, aimed at protecting investors from fraud.