(Consider This) Which of the Following Statements About Insurance and Risk

question 243

Multiple Choice

(Consider This) Which of the following statements about insurance and risk is true?

• A) Insurance inhibits economic growth and investment by discouraging risk-taking.
• B) Insurance transfers risk from those with a high tolerance for risk to those with a low tolerance for risk.
• C) Insurance companies always earn profits because insurance premiums always exceed the payout for insured events.
• D) Insurance transfers risk from those with a low tolerance for risk to those with a higher tolerance for risk.

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Definitions:

Flagship Store

The leading retail store of a brand, often containing the widest range of products and depicting the brand's identity.

Foreign Corporation

A business entity that is incorporated under the laws of a country different from where it conducts its operations or has its principal business activities.

S Corporation Election

A tax election made by small business corporations with 100 shareholders or less to be taxed as a pass-through entity, avoiding double taxation on corporate income.

Shareholders

Individuals or entities that own one or more shares of stock in a public or private corporation, thus having a financial interest in the company's performance.