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Mrac [35]
3 years ago
15

Retain the small predictable layers of risk and transfer the unpredictable catastrophic layer of risk. Does this statement promo

te appropriate risk financing decision making
Business
1 answer:
ELEN [110]3 years ago
7 0

Answer:

Yes the statement does

Explanation:

Retaining small predictable layers of risk and transferring the unpredictable catastrophic layer of risk to a more capable body is a very good approach towards  promoting appropriate risk financing decision making, this is because

Financial risk decisions are decisions taken between alternatives i.e risks associated with business activities . it is more appropriate to take alternatives with a predictable layer of risk,that way it would be easier for the management to handle the risk associated with it, while transferring the unpredictable catastrophic layer of risk to a more capable body ,like the Insurance companies .

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b. Bob listens to the radio station several hours per day but never donates since he suspects that other people will donate enough to keep the station on the air. 

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