What is one reason the federal government might "bail out" farmers in flood prone areas of the country?
A) Such flooding is not diversifiable and therefore only non-profit entities, such as the federal government, can cover the risks.
B) Such flooding is diversifiable, but insurance company CEOs are more concerned with their stockholder wealth than the well-being of farmers.
C) Such flooding is diversifiable, but the market for such insurance policies cannot clear without the assistance of the International Community.
D) Such flooding is known to happen on a regular basis and therefore there is no "risk" to be insured against.
Correct Answer:
Verified
Q83: Why does diversification fail to reduce risk
Q84: One reason health insurance is very expensive
Q85: Suppose a patent applicant approaches an insurance
Q86: What is one reason car insurance seems
Q87: Suppose a senior college football player approaches
Q89: Fair insurance is a contract between an
Q90: A risk-neutral person will invest in a
Q91: A risk-neutral individual will make investment decisions
Q92: If an individual makes her investment decisions
Q93: Concerning an investment project which of the
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents