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Homework answers / question archive / Which of the following is not an example of a risk transfer technique? a
Which of the following is not an example of a risk transfer technique?
a. the purchase of insurance from a commercial insurance company
b. the purchase of a futures contract to hedge against an increase in the price of a commodity
c. a firm’s decision to self-insure the costs of medical expense benefits owed to workers injured on the job
d. all the above are examples of risk transfer techniques
C or D?
C) a firm’s decision to self-insure the costs of medical expenses benefitsowedto workers injured on the job.
Explanation: Self insurance is a technique of risk retention and not risk transfer. Risk transfer is a technique in which the risk is transfered to a third party . In the above scenario, the risk lies with us. So, it is not an example of risk transfer.
