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

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asked Apr 11, 2018 in Class XI Business Studies by priya12 (-11,693 points)
Distinguish between Pure risk and Speculative risk on the following basis:

(a) Meaning, (b) Possibility of profits/loss (c) Risk Coverage

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answered Apr 11, 2018 by aditya23 (-1,360 points)
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.

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