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Question
An insurance company compensating a trader for loss due to fire is an example of removing the hindrance of finance.
Options
True
False
MCQ
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Solution
False
Explanation:
Insurance compensating a trader for loss due to fire is an example of removing the hindrance of risk, not finance. Insurance protects business from risks such as loss or damage due to fire, theft, accidents, etc. The hindrance of finance is removed by banking, which provides funds and credit to businessmen. Therefore, compensating loss by insurance corresponds to removing the hindrance of risk, not finance.
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