Which of the Following Statements Is Most Correct

question 12

Multiple Choice

Which of the following statements is most correct?

• A) When a risk is difficult to predict, financial instruments are created to transfer these risks.
• B) Financial instruments are created to transfer risks that are relatively easy to predict.
• C) Financial instruments require certainty of an event to be able to transfer risk.
• D) Financial instruments eliminate the risk from uncertainty, they do not transfer it.

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Definitions:

Reimbursement

The act of compensating someone for an expense or loss incurred.

Legal Liability

The legal responsibility to compensate for harm or damage caused by one's actions or failure to act.

Independent Contractor

A person who provides services to another entity under terms specified in a contract, but is not considered an employee of the company.

Office Equipment

Tangible property like desks, chairs, computers, and printers used in an office setting to facilitate work and operations.