Because of the Problem of Adverse Selection

question 58

Multiple Choice

Because of the problem of adverse selection,

• A) low-risk individuals may have a hard time finding insurance worth buying.
• B) high-risk individuals may have a hard time finding insurance worth buying.
• C) everyone is typically charged a lower premium.
• D) individuals who buy insurance act more recklessly.

---

Definitions:

Total Asset

The sum of a company's current and non-current assets, representing the company’s total owned resources.

Annual Sales

The total revenue a company generates from its operations over a one-year period.

Net Income

The total profit of a company after all expenses, taxes, and costs have been deducted from total revenue, indicating the financial performance in a given period.

Total Revenue

Total Revenue is the full amount of income generated by the sale of goods or services related to a company's primary operations.