Reinsurance ________

question 106

Multiple Choice

Reinsurance ________.

• A)allows the insured to reduce the premium by accepting a portion of the risk that would otherwise be allocated to the insurance company
• B)allows insurance companies to reduce their risks of exposure by allocating a portion of the risk to another company in exchange for a portion of the premium
• C)allows insurance companies to reduce their risks of exposure by allocating a portion of the risk to the insured in exchange for a rebate on the premium
• D)None of the above

---

Definitions:

Accounts Payable

Liabilities or the amount of money owed by a company to its creditors and suppliers for goods and services purchased on credit.

Operating Activity

Transactions and events that affect net income, including all activities not categorized as investing or financing activities, typically related to the core operations of a business.

Investing Activity

Financial transactions involving the purchase or sale of long-term assets and investments.

Financing Activity

Transactions involving the flow of cash between a company and its investors and creditors, related to equity and debt.