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Question I (18 marks) An insurance company is considering issuing three types of car insurance policies: (i) complete insurance coverage, (ii) complete coverage above and

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Question I (18 marks) An insurance company is considering issuing three types of car insurance policies: (i) complete insurance coverage, (ii) complete coverage above and beyond a $30,000 deductible, and (iii) 80 percent coverage of all losses. Which policy is more likely to create moral hazard problems? Explain your answer in details for all policies

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