Suppose There Are Two Types of People: "Good Risks" Who

Multiple Choice

Suppose there are two types of people: "good risks" who have 1 to 9 odds of falling ill,and "bad risks" who have a 1 to 3 odds of falling ill.If an insurance company cannot distinguish good risks from bad risks,what is the best way for it to deal with this problem?

A) Do not offer any insurance at 1 to 3 odds.
B) Make everyone purchase insurance that offers 1 to 3 odds.
C) Limit the amount of insurance that can be purchased at 1 to 9 odds.
D) Provide policies that offer 1 to 9 odds and 1 to 3 odds,allowing each group to purchase the appropriate policy.