What Are the Three Major Functions of Exchanges

question 44

Essay

What are the three major functions of exchanges?

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Definitions:

Incentivize

To provide motivation or encouragement through rewards or benefits, aiming to promote certain behaviors or actions.

Insurable Interest

A principle that requires an individual to have a stake in the safety or preservation of the insured object against loss or damage.

Financial Benefit

An economic advantage or gain received, such as income, dividends, or appreciation in asset value.

Fair Market Value

Fair market value is the price at which a willing buyer and a willing seller, both having reasonable knowledge of the relevant facts, would engage in a transaction.