Which of the Following Best Defines Insurance? ​

question 9

Multiple Choice

Which of the following best defines insurance? ​

• A)It is a contract whereby a party transfers his right to receive interest to a third-party such as an agent.
• B)It is a contract whereby a party transfers a risk of physical injury to the risk bearer for a fee.
• C)It is a contract whereby a party transfers his right to a claim for a particular fee.
• D)It is a contract whereby a party transfers a risk of financial loss to a risk bearer for a fee.

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Definitions:

Book Balance

The amount of money on the books or recorded in the financial statements, differing from the actual cash balance due to outstanding checks or deposits in transit.

Zero-balance Account

A type of bank account that maintains a balance of zero, with funds being transferred into it to cover checks written or transactions made.

Master Account

An overarching account that holds multiple sub-accounts, often used by businesses to manage various funds or investments.

Demands for Payment

Requests or invoices issued by creditors or suppliers for the settlement of outstanding debts.