Question

Insurance is a mechanism that helps reduce adverse consequences through ___________.Que 7: Insurance is a mechanism that helps reduce adverse consequences through ___________.
Pooling,
Spreading
Sharing of risk.
Pooling, spreading and sharing of risk.

Answer 1

Option “D” is the correct answer that is pooling, spreading, and sharing of risk.

• Pooling of risk, risk spreading and sharing, and the law of large numbers are significant features of insurance.

• Insurance is a process by which firms can reduce the financial consequences of a possible financial loss and uncertain event. Insurance reduces the effect of financial loss on firms, which also includes banks.

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