Multiple Choice
Which of the following is an example of adverse selection?
A) A homeowner with a large fire insurance policy allows the wiring in her house to deteriorate.
B) A woman with a large life insurance policy takes up sky diving.
C) Your brother-in-law borrows $20,000 from you to open a pizza parlor, but spends it gambling at the racetrack instead.
D) A man with a bad heart condition buys a large life insurance policy.
Correct Answer:
Verified
Correct Answer:
Verified
Q6: Recent research has shown that<br>A)countries with investor
Q7: Use the analysis presented in this chapter
Q8: Small savers face<br>A)high transactions costs in financial
Q9: Credit rationing refers to<br>A)the increase in the
Q10: The "lemons problem" exists in the market
Q12: The main reason why banks are the
Q13: A number of companies exist that specialize
Q14: Which of the following is NOT true
Q15: Which of the following is NOT true
Q16: The best known example of debt deflation