Multiple choice

Risk transfer means

  1. insuring with an insurance company

  2. insuring with another individual

  3. insuring with the owner of the company

  4. risk retention

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A Correct answer
Explanation

Risk transfer involves transferring the responsibility for losses to another party (which is insurance company in this case). Here, the losses that may arise as a result of a fortuitous event (or peril) are transferred to another entity.