Question

Insurance is a mechanism that helps reduce adverse consequences through

Answer 1

Answer:

Insurance is a mechanism through which firms can reduce negative financial consequences of an uncertain event or possible financial loss. Insurance reduces the impact of financial loss on firms, including banks. Pooling of risk, risk transfer, and law of large numbers are important features of insurance.

Answer 2

Insurance is a mechanism that helps reduce contrary significances through pooling, spreading, and risk-sharing.

• Pooling of risk, spreading of risk and risk-sharing, and the law of huge numbers are important features of insurance.

• Insurance is a course by which firms can decrease the financial significances of a possible financial loss and uncertain event. Insurance lessens the effect of financial loss on firms, which also consist of banks.

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