Katherine wants to start a retail business of fashionable items. Change in taste and preferences of customers may result in loss in such type of business. She is hesitating as she is aware of risks which are inherent in every business. She approaches her friend Kristina who is the owner of a retail shop. Kristina advises her to go ahead with her idea as she will get profit as return for undertaking risk. She also told her that some risks in business can be insured by taking insurance policy. On the basis of given information about Katherine answer the following questions; (a) What is business risk? (b) Identify the main features of business risk discussed in the above case. Also quote the lines for the identified feature (c) Is change in taste and preferences of customers? Pure risk or speculative. Why?
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Because Her idea was risky
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