One of the Four Characteristics of an Insurable Risk Is

question 37

Multiple Choice

One of the four characteristics of an insurable risk is ________.This means that the potential losses must be random and must occur independently of other losses.

• A) casualty
• B) predictability
• C) verifiability
• D) profitability
• E) unconnectedness

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Definitions:

Full Capacity

The maximum level of output that a company can sustain to make a product or provide a service.

Incremental Revenue

The additional revenue generated from a new business activity or decision.

Incremental Processing Costs

Additional costs incurred when increasing the production volume or when processing further beyond the split-off point.

Sell or Process Further

A decision-making process in cost accounting where a company must determine whether to sell a product as is or continue processing to add value.