Risk Assumption Is the Best Risk Management Tool When the Change

question 39

Multiple Choice

Risk assumption is the best risk management tool when the change of loss is ________ and the potential severity of loss is ________.

• A) low, low
• B) high, high
• C) low, high
• D) high, low

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Definitions:

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the business's operating cycle, whichever is longer.

Order of Liquidity

The arrangement of assets on a balance sheet in order of the time it would typically take to convert them into cash.

IFRS

International Financial Reporting Standards, a set of accounting principles that establish how transactions and other accounting events should be reported in financial statements on a global scale.

Fair Value

The estimated price at which an asset could be bought or sold in a current transaction between willing parties.