In Terms of Insurance,which of the Following Statements Is Explained
In terms of insurance,which of the following statements is explained by adverse selection?
A) A person with riskier characteristics tends to be more likely to buy insurance.
B) A person who is more risk-averse tends to be more likely to buy insurance.
C) Insurance companies charge risk-averse customers a higher premium, since they need more peace of mind.
D) None of these statements is true.