is speculative risk insurable

Risk means the probable disadvantageous, undesirable or unprofitable outcome of a fortuitous event. Insurable risk refers to the conditions that are vulnerable to danger of loss to a person or property. Almost all financial investment activities, for example, are considered speculative risk because they ultimately result in an unknown amount of success or failure. Almost all financial investment activities are examples of speculative risk, because such ventures ultimately result in an unknown amount of success or failure. Pure risk is the only insurable risk. Each offers a chance to make money, lose money or walk away even. Like all other economic hazards, it may be provided Types of risk are; subjective risk and objective risk. An objective risk is a relative variation of actual loss from expected loss. Unemployment is a definite economic hazard, resulting in measurable economic losses and meas-urable human distress. Speculative risks are not insurable. A) I only B) II only C) both I and II D) neither I nor II Speculative Risk: Three possible outcomes exist in speculative risk: something good (gain), something bad (loss) or nothing (staying even). Unlike pure risks, speculative risks are usually not insurable. Actually from the basic viewpoints of insurance only pure risks are insurable speculative risk is not . The main reason is that it is a high severity with high frequency with adverse selection. Speculative risk C. Equity risk D. Investment risk The loss must be accidental or random and unintentional. risk of fire as an Insurable Risk as indicated in the following figure 2.1 ... • Gambling creates a new speculative risk • Gambling is not socially productive ,because The winner’s gain comes at the expense of the loser • Gambling generally never the loser to his former financially position . Speculative Risk: Three possible outcomes exist in speculative risk; something good (gain), something bad (loss) or nothing (staying even). Pure Risk situations are those where there is a possibility of loss or no loss. Pure risks are the only insurable risks and present a potential for loss only with no possibility of gain, such as injury, illness, and death. Pure risk, also known as absolute risk, is insurable. They include credit sales, marketing, pricing, and more. Speculative risk refers to the situation where the direction of the outcome is not specific, i.e., it could lead to a condition of loss, profit, or break-even. This type of risk doesn’t have a predictable outcome. Examples of speculative risk include playing the stock market or placing bets at the blackjack table. Insurance involves the transfer of insurable risk while hedging handles risk that is typically uninsurable. For example, loss of life (death) or a fire either occurs, or it does not occur. An example for HOAs is sinkholes. 1. Is the Unemployment Risk Insurable? Answer to _____ is the chance (or probability) of a loss and is insurable. Why are speculative risks not insurable? Which type of risk is most likely to be insurable? Gambling is an example. Speculative risks are very common in business undertakings. Thus, a potential loss cannot be calculated so a premium cannot be established. The loss must be determinable and measurable. Therefore, speculative risks are not insurable. Those who Now coming to the last stage of classification of risk we may consider the subject from the viewpoint of the cause of risk and its effect. Pure risk B. Non-insurable risks are risks which insurance companies cannot insure because the potential losses or claims cannot be calculated. Actually from the basic viewpoints of insurance only pure risks, speculative risks their probabilities can calculated. Example of speculative risk is a high severity with high frequency with adverse selection whether it succeed! Transfer of insurable risk is handled by methods other than insurance: a type of risk is most likely make... 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