Answers
There are generally two types of risks that are systematic risk and unsystematic risk
systematic risk are those risk which cannot be controlled by internal factors
Examples are like to market risk, politial risks etc.
Unsystematic risk are thoset of risk which mainly caused by the internal factors and can be controlled
the example can be credit risk interest rate risk, financial risks etci.
In the given question, since a person has decided to start its own insurance agency then he will be mostly face by unsystematic risk
Here market risk and political risk are systematic risk so they will be neglected
Insurance firm will mainly face the financial risk due to the money it has taken from the different people and how he will invest the money and get return back to the customers in a profitable way
Hence the answer is option 3
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