(c) The head marketing department conducted a video conferencing informing the production and finance manager about customers requirements and expectations. Quantitative Finance Stack Exchange is a question and answer site for finance professionals and academics. For example, the downside risk of stock can be transferred by purchasing a call option. That’s a major differentiator from beneficiaries of traditional retirement plans, IRAs and variable annuities. Therefore, an insurer needs to consider a wide range of possible risks and the outcome that may affect the current and future financial position. Which of the following strategies involves sharing some of the risk burden with someone else, such as an insurance company? padding: 5px; margin-right: auto; Thanks for your comment! Risk Sharing is an entirely different concept. Asking for help, clarification, or responding to other answers. Choose the odd one out: (a) Insurance (b) Warehousing (c) Mining (d) Banking Question 5. his factory caught fire. font-size: 14px; It’s not a new idea having been around for thousands of years. The […] rev 2020.12.8.38142, The best answers are voted up and rise to the top, Quantitative Finance Stack Exchange works best with JavaScript enabled, Start here for a quick overview of the site, Detailed answers to any questions you might have, Discuss the workings and policies of this site, Learn more about Stack Overflow the company, Learn more about hiring developers or posting ads with us, Difference between Risk Transfer and Risk Sharing, MAINTENANCE WARNING: Possible downtime early morning Dec 2, 4, and 9 UTC…. MathJax reference. Did Biden underperform the polls because some voters changed their minds after being polled? Insurance involves sharing of risks . The most common example of risk transfer is insurance. padding: 5px; (c) Terms and conditions (d) Element of risk Question 4. ADVERTISEMENTS: Here is an essay on the risks faced by insurance companies. Risk transfer is a risk reduction method that shifts risk from the project to another party. Identify the scope of e-business highlighted in following cases: (a) Mr lakshay, the CEO of multinational company informed all employees for upcoming training programme through e-mail. The earliest known insurance policies were written some 5,000 years ago, to protect shippers against the loss of their cargo and crews at sea. text-transform: none; Purchasing an insurance is usually in areas beyond the control of … The funding of which of the following enterprise comes directly from the government treasury, is under an annual appropriation from the budget of the government and the revenue earned by it is also paid into the treasury? Damage to the motor car due to … Your health insurer requires you to pay part of the cost of your health care expenses in order to prevent over-utilization of healthcare services, and in order to keep health insurance premiums in check (although the idea of 100 percent coverage might sound great, it would likely lead to people seeking medical treatment more often, and premiums would skyrocket). The function of insurance is to spread the loss over a large number of persons who are agreed to co-operate each other at the time of loss. Any one of them would be devastated by the loss of a ship. For a cost of an insurance premium, an insurer takes on the financial responsibility for the risk occurrence. Why the economics activity not undercast the non economic activity, Provide me important questions for business studies class 11, Create questions or review them from home. 19. There seems to be a thin line between risk transfer and risk sharing. Risk acceptance B. font-size: 14px; } }, .btn { Which of the following is not an insurable risk? ERM involves “managing all of an organization’s risks to help an organization meet its objectives.” ERM is focused not just on the risk of loss, but on ways to create value for an organization. .fnt { But had not recieved any good feedback he decided to write an e mail to quality control manager of the company. Should I cancel the daily scrum if the team has only minor issues to discuss? How update Managed Packages (2GP) if one of the Apex classes is scheduled Apex. Risk acceptance B. The main risk of old age is the likelihood of not getting sufficient income to meet one’s financial needs in old age after retirement. To learn more, see our tips on writing great answers. By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy. Insurance companies, people came up with ideas for risk sharing on their own: the business insurance! 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