Which of the Following Is One of the Principles on Which

question 180

Multiple Choice

Which of the following is one of the principles on which the insurance industry rests?

• A)Trade in risk can produce mutual gains.
• B)Diversification can increase risk.
• C)Deductibles add to the problem of moral hazard.
• D)There are no principles in the insurance industry.

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Definitions:

Operating Expenses

Costs associated with a company's main operational activities, excluding direct materials, direct labor, and other direct costs, such as rent, utilities, and salaries.

Gross Profit

A financial measurement obtained by deducting the cost of goods sold from the overall sales revenue.

Written Evidence

Documented proof or records that support claims or events, often used in legal and financial contexts.

Freight-Out

The cost associated with transporting goods from a warehouse to the customer, typically classified as a selling expense.