Jenna opened a successful restaurant. One night, after the ...

[fahad]

Jenna opened a successful restaurant. One night, after the restaurant had closed, a fire started when the electrical system malfunctioned.
 
  In addition to the physical damage to the restaurant, Jenna lost profits that could have been earned while the restaurant was closed for repairs. The lost profits are an example of
  A) direct loss.
  B) nondiversifiable risk.
  C) speculative risk.
  D) indirect loss.

Question 2

Brad started a pest control business. To protect his personal assets against liability arising out of the business, Brad incorporated the business. Brad's use of the corporate form of organization to shield against personal liability claims illustrates
 
  A) fundamental risk.
  B) noninsurance transfer.
  C) risk retention.
  D) objective risk.

[djpooyouma]

Answer to Question 1

Answer: D

Answer to Question 2

Answer: B