Classification of Risk

Question 1

What are the four main types of risks?

Answer 1

Pure Risk
Speculative Risk
Fundamental Risk
Particular Risk

Question 2

What is the definition for each type of risk?

Answer 2

Pure risk - traditionally the basis of insurance cover
Speculative risk - where there is a possibility of financial gain
Fundamental risk - a risk that cannot be measured in financial terms
Particular Risk - only affects individuals rather than the whole society