Which of the Following Represents an Uninsurable Risk to a Business

question 139

Multiple Choice

Which of the following represents an uninsurable risk to a business firm?

• A) the possibility that its warehouse will burn down
• B) the possibility that several of its workers will be injured at work
• C) the possibility that an adverse change in consumer tastes will decrease the demand for the firm's product
• D) the possibility that a tornado will damage the plant and stop production for a month

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Definitions:

Stock Dividend

A distribution by a corporation to its shareholders using extra shares instead of monetary payment.

Retained Earnings

The portion of a company's profits that is held or retained and not paid out as dividends to shareholders.

Declaration

An official statement or announcement made by a person or an organization.

Convertible Securities

Financial instruments, such as bonds or preferred shares, that can be converted into a specified amount of another asset, typically shares of the issuing company.