The correct answer is: A. Cost of Loss Financing.
Cost of Loss Financing is the cost of transferring the risk of loss to another party, such as an insurance company. This includes the cost of self-insurance, loading in insurance premiums, and enforcing hedging arrangements.
Cost of Control of loss is the cost of taking steps to prevent or reduce the likelihood or severity of a loss. This includes things like installing security systems, training employees on safety procedures, and maintaining equipment.
Cost of Residual Uncertainty is the cost of uncertainty that remains after all other costs have been taken into account. This includes the cost of potential losses that are not covered by insurance or other risk transfer mechanisms.
Cost of Internal Risk Reduction is the cost of taking steps to reduce the likelihood or severity of a loss within an organization. This includes things like developing risk management policies and procedures, conducting risk assessments, and implementing risk controls.
In conclusion, the cost of loss financing is the cost of transferring the risk of loss to another party, such as an insurance company. This includes the cost of self-insurance, loading in insurance premiums, and enforcing hedging arrangements.