what does purchasing insurance for a business reveal about the business owner’s attitude toward financial…

what does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?\n○ it shows that the owner expects financial risk and is eliminating it by making an insurance company liable.\n○ it shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.\n○ it shows that the owner is willing to share ownership of the business to reduce financial risk.\n○ it shows that the owner is willing to budget for short - term financial risks to avoid long - term risks.

what does purchasing insurance for a business reveal about the business owner’s attitude toward financial risk?\n○ it shows that the owner expects financial risk and is eliminating it by making an insurance company liable.\n○ it shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.\n○ it shows that the owner is willing to share ownership of the business to reduce financial risk.\n○ it shows that the owner is willing to budget for short - term financial risks to avoid long - term risks.

Answer

Brief Explanations:

  • Analyze each option:
    • First option: Insurance doesn't eliminate risk (e.g., deductibles, coverage limits), so "eliminating" is incorrect.
    • Second option: Purchasing insurance means the owner pays premiums (monthly/periodic) to transfer risk to the insurer, acknowledging the risk. This matches insurance principles.
    • Third option: Insurance doesn't involve sharing business ownership; that's unrelated.
    • Fourth option: Insurance is for risk transfer, not budgeting to avoid long - term risks by handling short - term, and the logic is flawed.

Answer:

B. It shows that the owner acknowledges the financial risks and is willing to pay every month to transfer the risk to an insurance company.