​Use the Following Setup for Question

question 78

Multiple Choice

​Use the following setup for question
Both Nadia and Samantha are applying to insure their car against theft.Nadia lives in a secure neighborhood,where the probability of theft is 10%.Samantha lives in a lesser secure neighborhood where the probability of theft is 25%.Both Nadia and Samantha own cars worth $10,000,and are willing to pay $100 over expected loss for insurance.
-If the company can correctly anticipate the adverse selection,what premiums would it charge?​

• A)​$2500
• B)$2600
• C)$1000
• D)​$1100

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Definitions:

Military Might

The ability or capacity of a nation's armed forces to use force, especially as a means of defense or warfare.

Auto Manufacturers

Companies engaged in the design, development, manufacturing, marketing, and selling of motor vehicles.

Oil Companies

Corporations involved in the extraction, production, refinement, and distribution of oil and petroleum products.

Corporate America

A term referring to the United States' business sector, particularly large multinational companies and the economic and political influence they wield.