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Which statements about insurance are true? 1- Insurance protects against the the worst-case scenario. All rational people want to buy insurance. 2- Insurance costs money,
Which statements about insurance are true?
1- Insurance protects against the the worst-case scenario. All rational people want to buy insurance.
2- Insurance costs money, and therefore always decreases expected utility. Only irrational people want to buy insurance.
3- The decision to buy insurance does not depend on the insurance premium. The premium is a set cost without any random element.
4- No risk-lovers want to buy fair insurance.
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Statement 1 Insurance protects against the worstcase scenario All rational people want to buy insurance Evaluation True in part Insurance does protect against the worstcase scenario by transferring th...Get Instant Access to Expert-Tailored Solutions
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