Distinguish between Pure risk and Speculative risk on the following basis:

CBSE Class 11 CBSE Class 11 Business Studies
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1

Distinguish between Pure risk and Speculative risk on the following basis:
(a) Meaning, (b) Possibility of profits/loss © Risk Coverage

2

Basis of Distinction :

  1. Meaning :
    Pure risk : 1.Pure risk is the risk which involves only the possibility of loss or no loss.
    Speculative risk: Speculative risk involves both the possibility of gain as wellas possiblity of loss.
  2. Possibility of profits/ loss :
    1.Occurence of this risk may result in loss only and no gains.
    Speculative risk : Occurance of this risk may result in possibility of both gain as well as loss.
  3. Risk coverage :
    1.Insurance services provides coverage of such risks.
    Speculative risk : such risks can not be covered under insurance provisions.