Business risk is of two types (i) Speculative Risks involve both the possibility of gain as well as the possibility of loss. Speculative risks arise due to changes in market conditions including fluctuations in demand and supply, changes in prices or changes in fashion and tastes of customers.
What is business risk and its types Class 11?
Business risk is defined as the possibility of occurrence of any unfavourable event that has the potential to minimise gains and maximise loss of a business. In simple words, business risks are those factors that increase the chances of losses in a business and reduce opportunities of profit.
What is Business Risk Class 11?
11. Business Risk Business risk refers to the probability of losses or inadequate profits due to uncertainties or unexpected events, which are beyond control.
What is pure risk class 11?
(ii) Pure Risks involve only the possibility of loss or no loss. The chance of fire, theft or strike is example of pure risks. Their occurrence may result in loss whereas non-occurrence may explain absence of loss, instead of gain.
What are the 5 main risk types that face businesses?
The Main Types of Business Risk
- Strategic Risk.
- Compliance Risk.
- Operational Risk.
- Financial Risk.
- Reputational Risk.
What are the characteristics of business class 11?
Characteristics of Business
- Human activities: Business cannot be performed without human efforts. …
- Economic activities: …
- Production of goods and services: …
- Risk and uncertainty: …
- Profit motive: …
- Continuous process: …
- Satisfaction of customers: …
What is the role of profit in business class 11th?
(i) It is a source of income for business persons. (ii) It can be a source of finance for meeting expansion requirements of business. (iii) It indicates the efficient working of business. (iv) It can be taken as society’s approval of the utility of business.