​Use the Following Setup for Question

question 5

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 insurance company can correctly anticipate the adverse selection,

• A)​Only Samantha would buy insurance
• B)Only Nadia would buy the insurance
• C)Both of them would buy the insurance
• D)​Neither of them would buy the insurance