A Firm That Buys an Insurance Policy to Protect Itself

question 152

Multiple Choice

A firm that buys an insurance policy to protect itself against automobile wrecks is practising

• A) risk avoidance.
• B) risk transfer.
• C) risk acceptance.
• D) risk control.
• E) risk retention.

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Definitions:

Unit-Profit Margin

The measure of profit derived from each unit of product sold, calculated by subtracting the cost of goods sold from the sales price per unit.

Output

The cumulative output of products or services generated by a corporation, sector, or economic system.

Graph

A visual representation of data, often showing relationships between two or more variables, typically displayed using lines, bars, or points.

Economic Loss

A decrease in financial value, resources, or capital, occurring in various forms such as lost revenue, costs, or opportunity costs.