When Faced with an Insurance Policy Whose Premium Exceeds the Expected

Multiple Choice

When faced with an insurance policy whose premium exceeds the expected value of the claim:

A) no one will buy it.
B) only risk-tolerant individuals will buy it.
C) risk-averse individuals will buy it as long as the utility associated with the insurance is greater than the expected utility without the insurance.
D) risk-averse individuals will buy it as long as the utility associated with the insurance is less than the expected utility without the insurance.