Multiple Choice
Bill purchases property insurance for his office building, which includes coverage for fire damage. The policy offers premium discounts for smoke detectors, fire alarms, fire extinguishers and sprinkler systems. This is an incentive system to help avoid
A) adverse selection.
B) moral hazard.
C) optimal-stopping.
D) none of the above.
Correct Answer:
Verified
Correct Answer:
Verified
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