Multiple Choice
If you are looking to invest with a low-risk profile, which of the following types of investments is most appropriate?
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1. Introduction to Accounting
Types of Accounting
Multiple Choice
Which of the following types of financial losses can typically be insured against?
A
Losses from poor management decisions
B
Losses due to fire damage to business property
C
Losses due to employee resignation
D
Losses from changes in market demand for products
Verified step by step guidance1
Step 1: Understand the concept of insurable risks. Insurable risks are those that are measurable, predictable, and outside the control of the insured party. They typically involve unforeseen events rather than business decisions or market conditions.
Step 2: Analyze each option provided in the problem. For example, losses from poor management decisions are not insurable because they are within the control of the business and are not unforeseen events.
Step 3: Evaluate losses due to fire damage to business property. This type of loss is insurable because it is an unforeseen event, measurable, and can be covered by property insurance policies.
Step 4: Consider losses due to employee resignation. These are not insurable because they are related to human behavior and are not predictable or measurable in the same way as physical damage.
Step 5: Assess losses from changes in market demand for products. These are not insurable because they are tied to economic conditions and business strategy, which are not unforeseen events.
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