Commercial Applications
An entrepreneur faces financial losses due to a natural disaster that damages their inventory. Which auxiliary to trade could have mitigated this loss?
- Transportation
- Warehousing
- Insurance
- Banking
Commercial Orgs Intro
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Answer
Insurance
Reason — Insurance is the auxiliary to trade that protects businesses against the risk of loss due to theft, fire, accidents, floods, earthquake, storm, etc. By taking an appropriate insurance policy and paying a small premium, the entrepreneur could have transferred the risk to an insurance company and received compensation for the damaged inventory. This removes the hindrance of risk.
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