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All of the following are disadvantages of using insurance in a corporate risk management program EXCEPT: Option 1: Premium payments are not tax deductible. Option

All of the following are disadvantages of using insurance in a corporate risk management program EXCEPT:

Option 1: Premium payments are not tax deductible.

Option 2: Insurance coverage may be expensive.

Option 3: It may be time consuming to negotiate the coverages and terms.

Option 4: The presence of insurance may lead to reduced incentives to engage in loss control.

2. X Industries is a technology company that prides itself on the ability to react quickly to new product developments. It maintains a significant research and development budget. Regarding risk-reducing activities,X Industries is:

Option 1: More likely to retain risks thereby retaining use of more funds.

Option 2: More likely to retain risk because of their ability to react to changing developments.

Option 3: Less likely to retain risks to concentrate on what they do best.

Option 4: Less likely to retain risk to help ensure they have a steady supply of investment funds.

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