Question

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

(a) Meaning, (b) Possibility of profits loss, (c) Risk coverge.

Answer 1

$\begin{array}{ccc}\text{Basis}& \text{Pure risk}& \text{Speculative risk}\\ \text{1. Meaning}& \text{Pure risk which involes only}& \text{Speculative risk involes both the possibility}\\ & \text{the possibility of loss or no loss.}& \text{of gain as well as possibility of loss.}\\ \text{2. Possibility of}& \text{Occurence of this risk may result in}& \text{Occurance of this risk may result in}\\ \text{profit loss}& \text{loss only and no gains.}& \text{possibility of both gain as well as loss.}\\ \text{3. Risk coverage}& \text{Insurance services provide}& \text{Such risk cannot be covered}\\ & \text{coverges of such risks.}& \text{under insurance provisions.}\end{array}$