Which of the following statements regarding insurance and hedging is (

Which of the following statements regarding insurance and hedging is (are) true?

I. Insurance involves the transfer of an insurable risk while hedging handles risk that is typically uninsurable.
II. Insurance transactions can reduce objective risk, while hedging typically involves only risk transfer and not risk reduction.
A) I only
B) II only
C) both I and II
D) neither I nor II

ANSWER

Answer: C