which of the following is not an example of risk deflection or risk transfer? a)insurance, b) Warranty, c) Guarantee, d) all the above

Question

which of the following is not an example of risk deflection or risk transfer?

a) insurance,
b) Warranty,
c) Guarantee,
d) all the above

Answer 1

I would suggest that all of the above ARE EXAMPLES OF RISK DEFLECTION OR TRANSFER -- so the valid choice is not on the list.

Insurance is clearly a case where there is joint or full responsibility for risk, depending on the policy purchased.

Warranties and guarantees are designed to protect the consumer from risk, rather than the project that produced the product. At a very informal level, the consumer has a project -- to obtain a new product or service.

Both warranty and guarantee could end up with full responsibility for replacement of a faulty product. Though the warranty is technically limited to repair, unrepairable products are normally replaced as a good business practice.

Therefore I suggest all are examples of risk deflection/transfer -- its just depends on what project you are looking at (the buyer or the seller project).