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You would be amazed at what can be insured. Specifically to your point, some investments are insured against down side exposure. The easiest example is private mortgage insurance. If you buy a home and have less than 20% to put down you are generally required to pay for mortgage insurance. That insurance is protecting the investor who holds your mortgage note against the market risk of you home value declining to the point that should they have to foreclose there is sufficient money to pay them their principal. They are speculating that the return on your note will be realized. If you put 20% or more down they will accept that risk. If you want them to speculate that with less down they will still get the return tehy expect, you have to insure the principal generally down to 80%. Once you Loan to value drops below 80% you can generally drop the insurance.
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Explain the three motives for holding money?
The Transaction MotiveThe Precautionary MotiveThe Speculative MotiveThe Transaction MotivePeople will keep certain stock of money all the time to enable them to carry out their transactions.The Precautionary MotiveThe people also desire to hold some additional cash balances against unforeseen circumstances.The Speculative MotiveThe Speculative Motive implies the desire on the part of the public to keep certain amount of cash in reserve to make speculative gains out of the purchase and sale of securities.
What were some of the risks sailors faced as they traveled across the ocean to trade with foreign countries?
Storms, High Seas And Pirates
Which best explains why some people get life insurance and others don't?
people are willing to face different kinds of risks.
Do you believe that everyone is an entrepreneur?
No. Some people are more comfortable as an employee, since entrepreneurship comes with a lot of risks, responsibilities and uncertainty.
What are some political risks a country faces when engaging in global business?
There are any number of political risks a business can face when entering a country. Some of the more typical fears include confiscation, expropriation, or nationalization (commonly referred to as CEN), political violence (PV), along with changes to licenses or increased tax rates, etc, among other risks. Every country has a unique regulatory environment and risk assessments should be conducted before any investment.
What is the difference between pure and speculative risk?
1. Pure Risk situations are those where there is a possibility of loss or no loss. There is no gain to the individual or the organization. WHERE AS Speculative Risks are those where there is a possibility of gain as well as loss. The element of gain is inherent or structured in such a situation. 2. Pure risks are generally insurable while the speculative ones are not. 3. The conceptual framework of the risk pooling can be applied to the pure risks, while in most of the cases of speculative risks where it is not possible. However, there may be some situation where the law of mathematical expectation might be useful. 4. Speculative risk carry some inherent advantages ti the economy or the society at large while pure risks like uninsured catastrophes may be highly damaging. 5. In pure risk, for example - a car meet with an accident or it may not meet with an accident. If the insurance policy is bought for the purpose, then if accident does not occur, there is no gain to the insured. Contrarily, if the accident occurs, the insurance company will indemnify the loss. In speculative risk, for example - if you invest in the stock market, you may either gain or lose on stocks.
What is meant by the term insurable interest?
"Insurable interest" refers to a situation whereby one derives some kind of benefit from the existence or survival of another object or person. For example, one has insurable interest in one's house or car, but not that of one's distant relatives.
What are some good stock market investments?
There's no general answer available for that since this mainly depends on the type of investment one would like to do. Just some examples: for retirements savings one would choose investments with lower risks. On the other hand a more speculative investment would allow higher risks. But there are several more factors to consider before one could give a hint for stock market investments.
In NC do you have to have an insurable interest in the beneficiary?
You've got it backwards. A beneficiary is the person who has to have an insurable interest in the insured, and that is standard insurance law, in North Carolina or anywhere else. In order to take out insurance on anyone you must have an insurable interest in that person. That does not mean you must have an insurable interest in the beneficiary. Some states do and some states do not. My question is does NC require an insurable interest in the beneficiary? OK, since you are still questioning this, here is the more detailed answer. A beneficiary, by definition, is not being insured; instead, he or she is the person who will receive the insurance payment (in the case of life insurance) when the insured person dies. Since the beneficiary is not being insured, there is no reason why anyone would be required to have an insurable interest in the beneficiary. The reason why insurable interest is required, is that life insurance is not intended to be a form of gambling, otherwise anybody could take out an insurance policy on anybody else. Insurable intersest means that you personally would be financially harmed by the death of a particular person. Children depend upon their parents and therefore have an obvious insurable interest in their parents. Even if the child has grown up and no longer depends upon the parent, that child still has an insurable interest in the parent, because when the parent dies, the child will probably have to pay for the funeral, and will have other expenses relating to that death. Whereas, if you wanted to take out a life insurance policy on a complete stranger, you have no insurable interest. An employer can take out life insurance on an employee, called "key person insurance" if it is thought that the death of that employee would cause financial problems to the company that employs him or her. The star of a motion picture would normally be insured by the movie company, since the death of that person could make it impossible to finish filming, and the money invested up to that point could be lost. That's how insurable interest works. The beneficiary HAS insurable interest in the insured, the insured does NOT have an insurable interest in the beneficiary.
What are some of the risks of Mt Vesuvius?
some of the risks were that it had left many people dead this is very important
Can you get life insurance on your mother?
Yes, you can get life insurance on your mother. A child and mother have insurable interest in each other. Insurable interest is required in order to purchase life insurance on another person. Spouse have insurable interest, siblings, and parents-and-children. Your mother may need to answer some health questions, sign a life insurance application, and take a physical exam to qualify for life insurance.
Who can you take a life insurance policy on?
It is necessary to have an "insurable interest" in the life of the proposed insured. Stated otherwise, you need to have a "stake" in his/her continued life. That stake can be financial (such as a business partner), or familial (spouses have insurable interests in each others lives), or some combination. All insurance companies require the existence of an insurable interest, and most states (which regulate insurance) require that it exist at the inception of the policy.
What are some of the downfalls or risks of a chat room?
some of the risks in a chatroom could be the possibility of getting kidnapped or sexually harassed
What are the potential health benefits and risks of swimming?
what are some potential health benefits and risks of swimming
Risks associated with owning your own business?
what are some of the risks associated with owning your own business
Explain the three motives for holding money?
The Transaction MotiveThe Precautionary MotiveThe Speculative MotiveThe Transaction MotivePeople will keep certain stock of money all the time to enable them to carry out their transactions.The Precautionary MotiveThe people also desire to hold some additional cash balances against unforeseen circumstances.The Speculative MotiveThe Speculative Motive implies the desire on the part of the public to keep certain amount of cash in reserve to make speculative gains out of the purchase and sale of securities.
Why do people take out insurance?
reduce the risks in the future To transfer some or most of the risks to another entity!
