In Terms of Insurance,which of the Following Statements Is Explained

question 86

Multiple Choice

In terms of insurance,which of the following statements is explained by adverse selection?

• A) A person with riskier characteristics tends to be more likely to buy insurance.
• B) A person who is more risk-averse tends to be more likely to buy insurance.
• C) Insurance companies charge risk-averse customers a higher premium, since they need more peace of mind.
• D) None of these statements is true.

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