Choose the Best Answer

question 9

Multiple Choice

Choose the best answer. Enlisting a third party, such as an insurance company or contractor, to take ownership or responsibility for a risk is an example of:

• A) avoiding a risk by removing its source.
• B) accepting a risk.
• C) rejecting an unacceptable risk.
• D) transferring a risk.
• E) reducing a risk to an acceptable level through controls or preventative measures.

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Definitions:

Double

An increase by 100% or a factor of two in a particular measure or quantity.

Discount Rate

The interest rate used to discount future cash flows of a financial instrument to present value.

Redeemed

Redeemed refers to the action of exchanging a financial instrument, such as a bond or preferred stock, for cash or another form of value, often at its maturity or a predetermined price.

Bond

A promissory note issued by a business or a governmental unit.