Why Is a Large Number of Exposure Units Generally Required

question 17

Multiple Choice

Why is a large number of exposure units generally required before a pure risk is insurable?

• A)It prevents the insurer from losing money.
• B)It eliminates intentional losses.
• C)It minimizes moral hazard.
• D)It enables the insurer to predict losses more accurately.

Apply the concept of the lower of cost or net realizable value for inventory valuation.

Recognize the impact of inventory errors on financial statements.

Understand the effects of inventory valuation methods (FIFO, LIFO, Average Cost) on financial outcomes.

Analyze the impact of ending inventory adjustments on the subsequent period’s net income.

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Definitions:

Collective Bargaining

A process where employers and employees negotiate wages, hours, and working conditions through their representatives.

Threat of Strikes

The potential action of workers stopping work as a form of protest or to demand improved conditions or wages, used as leverage in negotiations.

Welfare Capitalism

An approach in which companies provide welfare-like services to their employees, such as housing and healthcare, to improve working conditions and reduce labor unrest.

Strategic Human Resource Management

An approach to managing human resources that supports long-term business goals and outcomes with a strategic framework.