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
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.
Related Questions
Identify the type of industry shown in the given image.
- Genetic Industry
- Extractive Industry
- Analytical Industry
- Synthetical Industry
A textile company produces cotton fabrics and sells them to wholesalers who distribute the goods to retailers across the country. The company also advertises its products to create brand awareness. What hindrance does advertising primarily aim to remove in this case?
- Hindrance of place
- Hindrance of knowledge
- Hindrance of finance
- Hindrance of risk
An insurance company compensating a trader for loss due to fire is an example of removing the hindrance of finance.
- True
- False
Identify the type of industry shown in the given image.
- Genetic Industry
- Extractive Industry
- Analytical Industry
- Synthetical Industry