Patrick Has an Old Beater Car and Wants to Keep

question 40

Multiple Choice

Patrick has an old beater car and wants to keep his insurance costs down.In order to minimize the financial impact of an accident he may cause,he should,at a minimum,carry which type of insurance?

• A) Property damage liability.
• B) Collision.
• C) Comprehensive physical damage.
• D) All of these are required for all vehicles.
• E) No coverage is required for any driver in the United States.

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Definitions:

Probability

A numerical assessment between 0 and 1 indicating how probable it is for an event to take place.

Expected Value

The weighted average of all possible values of a random variable, with weights being their respective probabilities.

Probability

A measure quantifying the likelihood of a specific event occurring, often expressed as a number between 0 and 1.

Von Neumann-Morgenstern Utility Function

A utility function that assumes individuals can rank their preferences under uncertainty, used in expected utility theory to describe choices.