How do speculative risk and pure risk differ? Which is of greater conc

How do speculative risk and pure risk differ? Which is of greater concern to a corporate executive? Why?

What will be an ideal response?

ANSWER

Pure risk is the possibility of loss. Speculative risk is the deviation or variability away from the expected outcome. Thus, a corporate executive is more concerned with speculative risk as deviations in any direction from the expected requires adjustments to planning, operations, finance, and all other functional areas of the firm.