Which of the Following Could You Reasonably Expect Your Risk

question 48

Multiple Choice

Which of the following could you reasonably expect your risk management supervisor to indicate as the most effective use of a business contract?

• A) an aid for a court to interpret a business arrangement
• B) a tool for the management of liability exposure
• C) a means of limiting warranties for defective products
• D) a mechanism limiting alternative dispute resolution

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Definitions:

Lessee

The entity that obtains the right to use an asset under a lease agreement from the lessor.

Uses the Asset

Refers to how an asset is employed within a business or investment strategy to generate returns or benefits.

Conditional Sales Agreement Lease

A financial arrangement where the lessee acquires an asset under a lease agreement but only becomes the owner upon full payment of the lease.

Secured Loan

A loan backed by collateral, reducing the risk for the lender and often resulting in a lower interest rate for the borrower.