Which of the following is not an example of a risk transfer technique? a

Finance Oct 27, 2020

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?

Expert Solution

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.

Archived Solution

Unlocked Solution

You have full access to this solution. To save a copy with all formatting and attachments, use the button below.

Already a member? Sign In

Important Note: This solution is from our archive and has been purchased by others. Submitting it as-is may trigger plagiarism detection. Use it for reference only.

For ready-to-submit work, please order a fresh solution below.

Or get 100% fresh solution

Get Custom Quote