Question

One reason the federal government might​ "bail out" farmers in flood prone areas of the​ country? A. Such flooding is​ diversifiable, but the market for such insurance policies cannot clear without the assistance of the International Community. B. Such flooding is​ diversifiable, but insurance company CEOs are more concerned with their stockminusholder wealth than the wellminusbeing of farmers. C. Such flooding is not diversifiable and therefore only nonminusprofit ​entities, such as the federal​ government, can cover the risks. D. Such flooding is known to happen on a regular basis and therefore there is no​ "risk" to be insured against.

Answer 1

Answer: Such flooding is not diversifiable and therefore only non-profit ​entities, such as the federal​ government, can cover the risks

Explanation:

One reason that can make the federal ggovernment to bail out farmers in the flood prone areas of the​ country will be in a situation whereby the flooding is not flooding is not diversifiable and therefore only non-profit ​entities, such as the federal​ government, can cover the risks.

In this situation since the risk associated with the flooding can't be diversified, this can lead to profit making entities to run from bailing out the farmers because they'll believe there's nothing to gain for them so it might be left for the government to take charge and help out.