Multiple Choice
Auto insurance companies charge a lower premium to drivers who carry a higher deductible because
A) insurance companies are not profit maximizers.
B) a driver's riskiness increases as the driver's deductible increases.
C) a high deductible signals a high risk.
D) insurance companies prefer that drivers carry no deductible.
E) a high deductible reveals that driver is a careful driver.
Correct Answer:
Verified
Correct Answer:
Verified
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