A Group of Farmers Agreed That If Any Farmer Suffered

question 5

Multiple Choice

A group of farmers agreed that if any farmer suffered a property loss,the loss would be spread over the entire group.In this way,each farmer is responsible for the average loss of the group rather than the actual loss that the farmer sustained.Which characteristic of insurance is embodied in this agreement?

• A)pooling of losses
• B)fortuitous losses
• C)risk avoidance
• D)indemnification

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Definitions:

Pension Plans

Financial programs established by employers or governments to provide income to employees after retirement.

Corporate Restructuring

The process of reorganizing the structure of a corporation to increase profitability, efficiency, or adapt to a changing environment.

Demotion

A reduction in rank, position, or status of an employee within an organization.

Reducing Headcount

A strategy used by businesses to lower expenses by decreasing the number of employees through layoffs, attrition, or retirements.