​Use the Following Setup for Question

question 4

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 successfully screen both Nadia and Samantha into appropriate contracts,it would earn​

• A)​Between a zero and $200 loss
• B)Between zero and $200
• C)$3500 loss
• D)​$3500 gain

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Definitions:

Corporations

Legal entities that are separate from their owners, capable of owning property, entering into contracts, and being sued.

Partnerships

Business arrangements where two or more individuals share the ownership, responsibilities, profits, and losses of a business enterprise.

Article 2(A)

A section of the Uniform Commercial Code that specifically deals with the leasing of goods.

Uniform Commercial Code

A comprehensive set of laws governing commercial transactions in the United States, intended to harmonize the law in all 50 states.