Pure Risk vs Speculative Risk
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Examples of Speculative Risks
-Almost all types of investments -GAMBLING - Remember
Define Pure Risk.
A category of risk in which loss is the only possible outcome; there is no beneficial result. Out of Risk takers control. Loss or No loss
# 1 method of handling Pure Risk
Avoidance
# 2 method of handling Pure Risk
Control -Loss Prevention -Loss Reduction
# 3 method of handling Pure Risk
Retention
Define Speculative Risk
Risk that results in an uncertain degree of gain or loss. All speculative risks are made as conscious choices and are not just a result of uncontrollable circumstances. -Loss -No loss -GAIN
# 4 method of handling Pure Risk
Transfer -Ex: One can buy insurance to protect homeowners
