Explain the Difference Between Speculative Risk and Pure Risk

question 107

Essay

 Explain the difference between speculative risk and pure risk. Which type of risk is of more concern to businesspeople?

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Definitions:

Notes Payable

Short-term or long-term liabilities representing amounts owed to creditors, documented by promissory notes.

Long-term Note Payable

A debt obligation that is not due for repayment within the next year or operating cycle of the business.

Periodic Instalment

Regular, scheduled payments made over time to repay a debt.

Unpaid Balance

The remaining amount of money that has not been paid on a loan or debt.