ECONOMICS
INSURANCE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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True
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False
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Either A or B
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None of the above
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Detailed explanation-1: -Expert-Verified Answer. Answer: The statement is false.
Detailed explanation-2: -A speculative risk has the potential to result in a gain or a loss. It requires input from the person looking to assume the risk and is therefore entirely voluntary in nature. At the same time, the result of a speculative risk is hard to anticipate, as the exact amount of gain or loss is unknown.
Detailed explanation-3: -Risk: Uncertainty arising from the possible occurrence of given events that would result in loss with no opportunity for gain.
Detailed explanation-4: -Generally, business risks are not insurable. A characteristic of business risks is that the loss or damage is in nature a ‘pure financial loss’. This may be defined as a loss for which it does not involve damage to physical property but only results in financial losses. Insolvency is an example.