Pro-Tect Insurance Company has recently been paying out more on car-theft claims than it expected. Cars with special antitheft devices or alarm systems are much less likely to be stolen than are other cars. Consequently Pro-Teet, as part of an effort to reduce its annual payouts, will offer a discount to holders of car-theft policies if their cars have antitheft devices or alarm systems.

Which of the following, if true, provides the strongest indication that the plan is likely to achieve its goal?

The decrease in the risk of car theft conferred by having a car alarm is greatest when only a few cars have such alarms.

The number of policyholders who have filed a claim in the past year is higher for Pro-Tect than for other insurance companies.

In one or two years, the discount that Pro-Tect is offering will amount to more than the cost of buying certain highly effective antitheft devices

Currently, Pro-Tect cannot legally raise the premiums it charges for a given amount of insurance against car theft.

The amount Pro-Tect has been paying out on car-theft claims has been greater for some models of car than for others.


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