Dynamic Risk :
Dynamic risks are risks associated with a changing economy. Important examples of dynamic risks include the changing tastes of consumers, technological change, new methods of production, and investments in capital goods that are used to produce new and untried products. Static and dynamic risks have several important differences –
(a) Most static risks are pure risks, but dynamic risks are always speculative risks where both profit and loss are possible.
(b) Static risks would still be present in an unchanging economy, but dynamic risks are always associated with a changing economy.
(c) Dynamic risks usually affect more individuals and have a wider impact on society than do static risks.
(d) Dynamic risks may be beneficial to society but static risks are always harmful.