If Automobile Insurance Companies Were Prevented from Charging Risk-Based Premiums,but

question 37

Multiple Choice

If automobile insurance companies were prevented from charging risk-based premiums,but could selectively screen potential policyholders,the likely effect would be to

• A) increase the number of young men obtaining insurance coverage relative to young women.
• B) decrease the number of young women obtaining insurance coverage relative to young men.
• C) decrease the number of young men obtaining insurance coverage relative to young women.
• D) do both A and B of the above.

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Definitions:

Debt Acquisition

The process of obtaining debt financing or purchasing existing debt from another entity.

Gain Or Loss

The financial result that occurs when the selling price of an asset differs from its original purchase price.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net assets of a business acquired. It reflects intangible assets such as brand reputation, customer relationships, and intellectual property.

Acquisition-Date Fair Value

The worth of an asset or company at the exact date it is acquired by another entity, based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.