INTRODUCTION TO ENTREPRENEURSHIP
DEFINITION OF ENTREPRENEURSHIP
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Question
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Risk
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Loss
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Speculative Risk
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Pure Risk
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Detailed explanation-1: -Pure risk refers to risks that are beyond human control and result in a loss or no loss with no possibility of financial gain. Fires, floods and other natural disasters are categorized as pure risk, as are unforeseen incidents, such as acts of terrorism or untimely deaths.
Detailed explanation-2: -Personal risks directly affect an individual and may involve the loss of earnings and assets or an increase in expenses. For example, unemployment may create financial burdens from the loss of income and employment benefits.
Detailed explanation-3: -Investing in the stock market is an example of a speculative risk. One can only speculate on whether the investment will produce a profit or a loss. Insuring an automobile is an example of pure risk. If the insured auto is involved in an auto accident, there is most definitely going to be some sort of damage (loss).