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WAEC Commerce 2004 Question 43

Question 43

Insurance

The amount of insurance premium to be paid depends on the

  1. A.supply and demand of a particular company's service
  2. B.extent of the possible loss and the frequency of risk
  3. C.number of insurance companies in a place
  4. D.amount of profit to be made by the insurer.
Show the answer and explanation

Answer: B (extent of the possible loss and the frequency of risk)

Explanation

Premiums depend on how large and how likely the loss is.