Which of the following choices incur speculative risk?(1 point)

Responses

stocks
stocks

fire insurance on a house
fire insurance on a house

options
options

life insurance
life insurance

high interest savings account
high interest savings account

1 answer

Speculative risk refers to risks that can lead to either a profit or a loss, as opposed to pure risks, which only have the potential for loss. Among the choices provided, the ones that incur speculative risk are:

  • Stocks
  • Options

Both stocks and options involve the potential for gain or loss based on market performance and are subject to fluctuating values, making them speculative in nature. The other options listed (fire insurance, life insurance, high-interest savings account) are examples of pure risks or lower-risk situations that do not involve the possibility of profit, only the possibility of loss.