Which of the following statements does NOT describe a function a insurance? A. Insurance transfers risk...

Which of the following statements does NOT describe a function a insurance?

A. Insurance transfers risk from risk-averse parties to risk-neutral parties

B. Insurance sellers must be more risk averse than insurance buyers

C. Insurance is a wealth-creating transaction

D. Insurance moves risk from lower-value uses to higher-value uses

Expert Solution

C. Insurance is a wealth-creating transaction

Explanation: Insurance does not help in creating wealth; rather, it helps in avoiding losses.

Rahul Sunny answered 2 years ago

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