BUISENESS MANAGEMENT
RISK MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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the chance that your house could catch on fire
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the possibility that you will have an accident while driving to school
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becoming sick with the flu
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placing a bet on a horse face
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Detailed explanation-1: -Gambling and investing in the stock market are two examples of speculative risks.
Detailed explanation-2: -Speculative risk has a chance of loss, profit, or a possibility that nothing happens. Gambling and investments are the most typical examples of speculative risk. The traditional insurance market does not consider speculative risks to be insurable.
Detailed explanation-3: -Speculative risk is a category of risk that can be taken on voluntarily and will either result in a profit or loss. All speculative risks are undertaken as a result of a conscious choice.
Detailed explanation-4: -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).