Question

____ risk exists in situations that offer potential for gain as well as for loss.

Answer 1

Speculative risk exists in situations that offer potential for gain as well as for loss.

What is Speculative risk ?

Speculative risk is a type of risk that can be taken deliberately and will result in either a profit or a loss. All speculative risks are the outcome of a deliberate decision.

In speculative risk, there are three conceivable outcomes: something good (gain), something bad (loss), or nothing (staying even). Gambling and stock market investing are two instances of speculative hazards. Each gives the opportunity to gain money, lose money, or even walk away.

Whereas pure risk is uncontrollable and may only result in a loss if it occurs, speculative risk is voluntary and can end in either a profit or a loss. As a result, speculative risks are considered controllable hazards.

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