A family's automobile that is a total loss as a result of a collision is an example of which of the following types of risk?
I.Speculative risk
II.Diversifiable risk
A)I only
B)II only
C)both I and II
D)neither I nor II

Question

Quizplus · Accepted Answer

The family's automobile that is a total loss as a result of a collision is an example of diversifiable risk because it can be mitigated or transferred through insurance. It is not an example of speculative risk because it is not a voluntary, strategic business decision with a potentially large payoff or loss.

A Family's Automobile That Is a Total Loss as a Result