To what extent is risk present in business?
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Answer : The term ‘business nsk refers to the POSSibilityof Inadequate profits or even losses due to uncertainties or unexpected events. BUSiness risks are of two types speculative and pure Speculative risks Involve both the possibility of gall” as well as the posslbihty of loss Speculanve risks arise due to changes In market conditions, changes in prices or changes In fashion and tastes of customers Pure risks involve only the possibility of loss or no loss. The chances of fire, theft or strike are examples of pure risks.
Nature of business risks can be understood in terms of the following characteristics
Business risks arise due to uncertainties.
Risk is an essential part of every business.
Degree of risk depends mainly upon the nature and size of business. (iv) Profit is the reward for risk taking.
Nature of business risks can be understood in terms of the following characteristics
Business risks arise due to uncertainties.
Risk is an essential part of every business.
Degree of risk depends mainly upon the nature and size of business. (iv) Profit is the reward for risk taking.
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