n NISM Certifications
X NISM Series X
Medium

When does an individual retain the risk of loss rather than transferring it to an insurer?

Practice question from NISM Series XB- Investment Adviser (Level 2) Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    When premiums are high and not feasible

  2. B

    When the potential for gain exists

  3. C

    When the value of insurable item is very high

  4. All of the above

    Correct answer

Why this is the answer

Risk retention occurs when insuring costs are prohibitive or the individual perceives potential gains or high value, making self-insurance more feasible.

Test yourself for real

Take a full NISM Series X mock test.

Same duration, same weighting, same difficulty distribution as the real exam — with explanations on every question.