The value of insurance comes from its ability to reduce the cost of ________ for the firm.
A)adverse selection
B)vertical integration
C)fraud
D)market imperfections
E)capital

Question

Quizplus · Accepted Answer

Market imperfections are the reason why insurance is valuable. Insurance can help to reduce the cost of market imperfections for the firm by providing a way to pool risks and share the costs of losses.

The Value of Insurance Comes from Its Ability to Reduce