Final answer:
Consumer report is the primary source of information used in the risk selection process, aiding in informed decision-making and risk mitigation.
Explanation:
Consumer report is the basic source of information used by the company in the risk selection process. A consumer report provides valuable insights into an individual's credit history, payment habits, and financial behavior, which are crucial factors in assessing risk.
Utilizing consumer reports allows companies to make informed decisions based on reliable data, helping them mitigate risks associated with potential customers. This source of information helps in minimizing adverse selection and moral hazards, promoting better risk management practices.
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