Multiple choice

Earthquake is an example of

  1. catastrophic risk

  2. dynamic risk

  3. marginal risk

  4. speculative risk
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A Correct answer
Explanation

Catastrophic risk is the one where a large number of people are exposed to the risk of a large loss by reason of the occurrence of a peril. It could be a natural calamity in the form of earthquakes, floods, droughts or even terrorist attack resulting in loss of life, destruction of infrastructure on a large scale.

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