MANAGEMENT

Detailed explanation-1: -Chance of loss is closely related to the concept of risk. Chance of loss is defined as the probability that an event will occur. Like risk, probability has both objective and subjective aspects.

Detailed explanation-2: -Risk: Uncertainty arising from the possible occurrence of given events that would result in loss with no opportunity for gain.

Detailed explanation-3: -A speculative risk has the potential to result in a gain or a loss.

Detailed explanation-4: -Pure risks can be divided into three different categories: personal, property, and liability. There are four ways to mitigate pure risk: reduction, avoidance, acceptance, and transference. The most common method of dealing with pure risk is to transfer it to an insurance company by purchasing an insurance policy.