An Individual Can Almost Eliminate Risk by Taking a Small

question 31

Multiple Choice

An individual can almost eliminate risk by taking a small share in many independent events or by taking advantage of the predictability associated with large numbers of independent events. This is known as:

• A) specializing.
• B) floating.
• C) pooling.
• D) insuring.

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Definitions:

Specific Assets And Liabilities

Items on a company's balance sheet that are clearly identified and quantified, including cash, inventory, debt, and equity.

Incorporated Business

A business entity that is legally recognized as separate from its owners, with its own rights and liabilities.

Proportionately Adjusted

Refers to the method of adjusting figures or data in financial statements to reflect the ownership interest accurately.

Joint Operation

A business activity in which two or more parties share control and management.