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Business, 18.08.2020 17:01 nihadsalim10
Both Nadia and Samantha are applying to insure their car against theft. Nadia lives in a secure neighborhood, where the probability of theft is 10%. Samantha lives in a lesser secure neighborhood where the probability of theft is 25%. Both Nadia and Samantha own cars worth $10,000 and are willing to pay $100 over the expected loss for insurance.
If the insurance company can successfully screen both Nadia and Samantha into appropriate contracts, it would earn?
a. $3500 loss.
b. Between zero and $200.
c. Between zero and $200 loss.
d. $3500 gain.
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Both Nadia and Samantha are applying to insure their car against theft. Nadia lives in a secure neig...
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