An 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

A total loss due to collision is an example of diversifiable risk, as it is a personal or unique risk that can be managed through insurance or other risk management strategies. It is not a speculative risk, which involves a chance of gain as well as loss.

An Automobile That Is a Total Loss as a Result