An Insurance Lacks the Information Needed to Distinguish Between Safe

question 8

Multiple Choice

An insurance lacks the information needed to distinguish between safe and risky people and therefore charges everyone the same average premium. As a result, the ________ people will not buy insurance, and the industry will be selling only to ________ people.

• A) risk-neutral, safe
• B) safe, risky
• C) risky, safe

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Definitions:

Oocytes

Immature eggs found in the ovaries of females, which can mature and potentially be fertilized.

Hormone

Substance secreted by endocrine tissues into the blood that acts on a target tissue to produce a specific response.

Follicles

Structures within the ovaries that contain a developing egg and produce hormones, or small sacs in the skin from which hair grows.

FSH

Follicle-stimulating hormone, a gonadotropic hormone secreted by the anterior pituitary gland responsible for maturation of ovarian follicles and sperm production.