Question

All of the following circumstances must be met for loss retention to be an effective risk management technique, EXCEPT: Probability of loss is unknown.

- A) True
- B) False

Answer 1

Loss retention is an effective risk management technique, and the probability of loss being unknown is not a requirement for it to be effective in managing risks.

Step-by-step explanation:

Loss retention is an effective risk management technique that involves accepting and absorbing the potential losses that may occur. However, not all circumstances need to be met for loss retention to be effective. One circumstance that is not a requirement for loss retention to be effective is when the probability of loss is unknown.