An insurance policy is a contract that: a. benefits the parties ...

[ishan]

An insurance policy is a contract that:
 a. benefits the parties if they have the same degrees of risk aversion.
  b. benefits the parties if both of them are risk neutral.
  c. benefits the parties if they have different degrees of risk aversion.
  d. benefits the parties if either of them is risk neutral.

Question 2

Asymmetric information includes the concepts of
 A) moral hazard transfer costs.
  B) adverse selection and public goods.
  C) adverse selection and moral hazard.
  D) negative and positive externalities.

[britb2u]

Answer to Question 1

C

Answer to Question 2

C