Matty and Rudy Are the Same Age,live in the Same

Multiple Choice

Matty and Rudy are the same age,live in the same town,and hold similar jobs a similar distance from their respective homes.They are so similar,in fact,that to the insurance company,they look the same and are offered the same insurance options.However,Matty has never been a particularly good driver and so buys a lot of auto insurance.Rudy,on the other hand,takes pride in being an excellent driver and so only carries the minimum insurance required.This example illustrates the potential for :

A) risk pooling.
B) risk aversion.
C) adverse selection.
D) diversification.