Questions and Answers
What is speculative risk?
a category of risk that results in an uncertain degree of gain or loss.
Which of these can you invest in without assuming any risk?
Which of these choices is not possible with speculative risk?
Which is a risk control strategy?
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Which is an example of risk retention?
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Study Notes
Speculative Risk
- Speculative risk involves uncertainty about potential gains or losses from an investment or decision.
- This category of risk can result in a net gain, a net loss, or no change.
No Risk Investments
- There are no investment options available that carry zero risk.
- All investments come with varying degrees of uncertainty and potential loss.
Speculative Risk Limitations
- Guaranteed success cannot be achieved with speculative risk.
- Speculative risks are characterized by their unpredictability and potential fluctuations.
Risk Control Strategies
- Avoidance is a common strategy used to control risk.
- This strategy entails eliminating the possibility of the risk occurring by refraining from certain activities or investments.
Risk Retention
- Risk retention is exemplified by the choice of having deductibles in insurance policies.
- This means accepting a certain level of risk and managing potential losses within predetermined limits.
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Description
Test your knowledge of financial risks with these quick check flashcards. Understand the concepts of speculative risk, risk control strategies, and investment decisions. Perfect for beginners and those looking to reinforce their financial literacy.
