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Insurance works by spreading the loss caused by an uncertain event over:
AOne wealthy person
BThe government alone
CThe bank branch alone
DMany exposed persons
Answer & Solution
Correct answer: D. Many exposed persons
1. People facing common risks pool small contributions.
2. The fund compensates whoever suffers loss.
3. So loss is spread over many persons.
_Source: NCERT Class 11 Business Studies, Chapter 4, Business Services._
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