Finance Question.

Suppose that female drivers are more likely to have an automobile accident than male drivers. As a result, insurance companies charge higher insurance premiums for female drivers. Suppose one insurance company decided to charge female drivers and male drivers the same premium based on the average risk of an accident among both groups. Using your knowledge of the problems associated with asymmetric information, explain whether you think this insurance company will be profitable. This insurance company is likely to be profitable because of the problem of (Click to select) The insurance premium based on the average risk of an accident among both female and male drivers will be (Click to select) than the premium for male drivers alone and (Click to select) v than the premium for female drivers alone. Therefore, (Click to select) V drivers will not choose to be insured by this company but (Click to select) V drivers will. The premium charged based on the average risk of female and male drivers (Click to select) v] be sufficient to cover the claims of (Click to select) v driver pool and so the company (Click to select) vbe profitable. Suppose that female drivers are more likely to have an automobile accident than male drivers. As a result, insurance companies charge higher insurance premiums for female drivers. Suppose one insurance company decided to charge female drivers and male drivers the same premium based on the average risk of an accident among both groups. Using your knowledge of the problems associated with asymmetric information, explain whether you think this insurance company will be profitable. This insurance company is likely to be profitable because of the problem of (Click to select) The insurance premium based on the average risk of an accident among both female and male drivers will be (Click to select) than the premium for male drivers alone and (Click to select) v than the premium for female drivers alone. Therefore, (Click to select) V drivers will not choose to be insured by this company but (Click to select) V drivers will. The premium charged based on the average risk of female and male drivers (Click to select) v] be sufficient to cover the claims of (Click to select) v driver pool and so the company (Click to select) vbe profitable