Both Nadia and Samantha are applying to insure their car against theft. Nadia lives in a secure neighborhood, where the probability of theft is 10%. Samantha lives in a lesser secure neighborhood where the probability of theft is 25%. Both Nadia and Samantha own cars worth $10,000 and are willing to pay $100 over the expected loss for insurance.

If the insurance company can successfully screen both Nadia and Samantha into appropriate contracts, it would earn?

a. $3500 loss.

b. Between zero and $200.

c. Between zero and $200 loss.

d. $3500 gain.