Alberta General Insurance Level 1 Practice Exam

Question: 1 / 400

What does investing of capital involve for an insurer?

Investing in every available opportunity

Allocating resources without assessing risks

Choosing specific risks to invest in

Investing of capital for an insurer involves choosing specific risks to invest in. This means that an insurer has to carefully assess and select which investments to make, taking into consideration the potential risks and returns involved. Option A is incorrect because investing in every available opportunity can be considered a reckless and overly aggressive approach, which may result in significant losses. Option B is incorrect because allocating resources without assessing risks can also lead to poor investment decisions and negative consequences. Option D is incorrect because avoiding all forms of investments is not a viable strategy for an insurer, as investments can help generate income and strengthen their financial position. Therefore, option C is the most appropriate and responsible approach for an insurer when it comes to investing their capital.

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Avoiding all forms of investments

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