Multiple Choice
Which of the following actions best illustrates adverse selection?
A) A person adds risky stock to his portfolio.
B) A person who has narrowly avoided many accidents applies for automobile insurance.
C) A person is unwilling to buy a stock when she believes its price has an equal chance of rising or falling $10.
D) A person purchases homeowners insurance and then checks his smoke detector batteries less frequently.
Correct Answer:
Verified
Correct Answer:
Verified
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