5.02 Types of Risk
"I can describe types of risk & explain ways to handle risk"
Risk
Economic Risk
http://www.investinganswers.com/financial-dictionary/economics/economic-risk-2918
bobbrinker.educatedinvestor.com
Non-Economic Risk
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Pure Risk
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Speculative Risk
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Controllable Risk
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Insurable Risk
carinsurance.arrivealive.co.za
Uninsurable Risk
www.investopedia.com/terms/u/uninsurable-risk.asp
tcktcktck.org
Examples of each type of risk:
Economic Risk- A central bank may raise interest rates and may result in economic conditions impacting an investment
Non-Economic- Asking someone out on a date
Pure Risk- An earthquake hitting your house, in California
Speculative Risk- A company purchases shares or invest in stock
Controllable Risk- If you are giving birth and go to the hospital verses doing it at home
Uncontrollable Risk- For heart disease are age, race, gender, and heredity
Insurable Risk- Having liability insurance on your car
Uninsurable Risk- Receiving insurance on your stock investments
Ways that businesses manage risk:
Transfer- Insure the risk
Insure- arrange for compensation in the event of damage to or loss of
Assume- to do the risky activity with no consequences