Risk is the probability of suffering emotional, physical or financial harm in the future.

There are two types of risk

  1. speculative
    • chance of loss or gain
      • e.g., stock market, gambling
  2. pure (nonspeculative)
    • chance of loss only
      • e.g., no financial gain from injury even with insurance

There are techniques for analyzing risk.

Insurance reduces uncertainty about nonspeculative financial losses using risk management techniques.

Pure Risk

Here are several types

  • property risk: loss or damage
  • liability risk: personal injury or damage to property
  • failure of others to you
    • e.g., your car breaks down because the mechanic didn't fix it properly —> cost of towing and inconvenience (e.g., late for meeting)
  • personal risk

PS Network

Market Better
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Spark Insight
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Grasp Risk
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Tame Risk
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