Insurance Hypothesis Tells Us That

question 5

Multiple Choice

Insurance hypothesis tells us that:

• A)investors can insure themselves against loss by investing in a diverse investment portfolio should an individual investment fail.
• B)investors will demand that financial reports be audited as a way of insuring against some of their loss should their investment fail.
• C)the entity can take out insurance to protect itself from such risks as employee or management fraud which can lead to material misstatements in the financial statements.
• D)investors cannot insure themselves against loss when investing in an entity.