Question：Which of the following statements is incorrect?
A. Risk involves situations or events which may or may not occur, but whose probability of occurrence can be calculated statistically and the frequency of their occurrence predicted from past records.
B. Uncertainty can be converted to risk by taking out insurance.
C. Insurance deals with risk.
D. Uncertain events are those whose outcome cannot be predicted with statistical confidence.
The correct answer is:Uncertainty can be converted to risk by taking out insurance.
Risk involves situations or events which may or may not occur, but whose probability of occurrence can be calculated statistically and the frequency of their occurrence predicted from past records. This is true.
The statement that insurance deals with risk is true because insurance is a method of risk management (risk transfer).
It is true to say that uncertain events are those whose outcome cannot be predicted with statistical confidence.
Taking out insurance does not change the nature of uncertainty. It may be that insurance is not available for uncertain events.