Here's How Your Insurance Needs Will Change, 9 Hidden Insurance Perks Your Credit Card Provider Might Offer, 5 Different Types of Insurance and Who They're Best For. It is the risk of human, process, system, or technological failure as well as risks from external events (i.e., event risk). Definition of Speculative Risk Not … done in order to make a profit even though there is risk that you may lose money: We should remember that a sign of the end of the first bubble was a large number of … Insuranceopedia Terms:    A risk, in a business context, is anything that threatens an organization's ability to generate profits at its target levels. Insurance – Speculative Risk cannot be insured. G    Some assets—such as an options contract—carry a combination of speculative risk and risk that you can hedge. V    Sports betting also qualifies as having speculative risk. Speculative Risk vs. en.wiktionary.org. adj. Given to, characterized by, or based upon speculation or conjecture: speculative articles about the origin of language. What You and Your Business Need to Know About Liability Insurance, Seniors' Life Insurance: How to Make Sure You're Covered. 3 : of, relating to, or being a financial speculation speculative stocks speculative venture. Investment refers to the application of resources (money) to make more money, or the buying of goods that are not consumed today, but are used to create future wealth. Some investments are more speculative than others. speculative Definitions. Insurance provides protection from the exposure to hazards and the probability of loss. Example – Trading in the stock market may result in making either a profit or loss or neither a profit nor loss i.e., no change in the investment value. In the end, the amount of speculative risk will depend on whether the option is bought or sold and whether it is hedged or not. 2 : marked by questioning curiosity gave him a speculative glance. L    H    It requires input from the person looking to assume the risk and is therefore entirely voluntary in nature. A    Speculative risk is a category of risk that, when undertaken, results in an uncertain degree of gain or loss. Almost all financial investment activities are examples of speculative risk, because such ventures ultimately result in an unknown amount of success or failure. If a person is betting on which team will win a football game, the outcome could result in a gain or loss, depending on which team wins. 1.4.1 Speculative and Pure Risks. Legal definition of speculative risk: a risk that may result in either a loss or a gain. E    Speculative definition, pertaining to, of the nature of, or characterized by speculation, contemplation, conjecture, or abstract reasoning: a speculative approach. Speculative Risk Meaning – Speculative Risk involves three possible outcomes: loss, gain or no change. When an outcome cannot be predicted but results from choices that a person makes of their own volition or free will, that risk is considered speculative. You Need Insurance for Renovations, Parental Liability: When You're Responsible for Another's Actions. Speculative risk is a category of risk that can be taken on voluntarily and will either result in a profit or loss. If you buy a call option, you know in advance that your maximum downside risk is the loss of the premium paid if the options contract expires worthless. Speculative Risk Unlike pure risk, speculative risk has opportunities for loss or gain and requires the consideration of all potential risks before choosing an action. How Much Homeowner's Insurance Do I Need? 1. a. This comes from the word speculate , which means to "invest in stocks, property, or other ventures in the hope of gain but with the risk of loss". The offers that appear in this table are from partnerships from which Investopedia receives compensation. M    A protective put is a risk-management strategy using options contracts that investors employ to guard against the loss of owning a stock or asset. Sports betting, investing in stocks, and buying junk bonds are other examples of activities that involve speculative risk. K    Hiring a Contractor? Pure Risk There are two types of risks: speculative risk vs. pure risk. 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