Speculative Risk (High): Stocks that carry major risks on investments with unpredictable results, but the potential to earn very high returns. Pure risks are risks that have no possibility of a positive outcome—something bad will happen or nothing at all will occur. ... the annual expenses, include expenses for children, housing, etc. Other examples of speculative risk include gambling and real estate. When investing in speculative stocks, the investor must realize that while there is a chance of great returns, there is also the possibility for great loss. feature a chance to either gain or lose (including investment risk, reputational risk, strategic risk, etc.). Exposure is the potential for loss. The pure risk consequences of speculative risks are certainly insurable, but not the speculative risk itself. This distinction fits well into Figure 1.3 "Roles (Objectives) Underlying the Definition of Risk". Pure Examples of pure risk include the possibility of financial loss caused from accident, illness, and death. Speculative Risk vs. d. Speculative risks. Which of the following is true about speculative risks? In this case, assume it will be $50,000 for the first year, and will increase at 5% per year in real terms. The most common examples are key property damage risks, such as floods, fires, earthquakes, and hurricanes. Risk exposure is a quantified loss potential of business. Speculative c. Nonfinancial d. All of the above. Insurable risks include: a. Pure b. a. One can understand that speculative income is a complex deal and at times can be quite risky. Speculative Risk. Pure Risk vs. Lesson Summary. The right-hand side focuses on speculative risk. Gambling is an extreme example, assuming the game is played fairly. Pure Risk There are two types of risks: speculative risk vs. pure risk. A) A firm cannot profit from its exposure to speculative risk. C) Risk managers must be tolerant of negative outcomes related to speculative risks. Examples of speculative risks are investing in the stock market, placing bets on race horses and gambling. Exposure is the cause of loss and event insured against in a policy. The taxpayer has to take care of several transactions and their actual credibility as speculative or normal business. Speculative risks Risk that features a chance to either gain or lose. D) Speculative risk is not a source of great concern for risk managers. It is important to determine whether speculative transaction can really work up to good profits within the affirmed legalities. Insurance companies typically cover pure risks. Question: QUESTION 6 Speculative Risks Are Symmetrical In The Sense That They Offer The Chance Of A Gain As Well As A Loss, While Pure Risks Are Those That Can Only Lead To Losses. a. Speculative risks. b. Which of the following statements is not false regarding exposure? 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