(a) Risk whose probability cannot be calculated and which cannot be insured against is known as non-insurable risk.
Example: Loss due to fall in demand, changing technology, changing fashion etc.
(b) General utility functions are:
1. Safe custody of valuables: Banks offer safe deposit vaults (called lockers) where customers can keep their jewellery, shares, debentures, insurance policies and other valuables. In this way banks assume safe custody of valuables and important documents of customers. Banks charge rent for this service.
2. Issue letters of credit, travellers cheques, etc: Commercial banks issue letters of credit to importers. They also issue cheques to travellers to make money available to them at the place of requirement. Travellers cheques relieve the tourists from the problem of carrying cash during the tour. Banks also provide credit card and ATM facilities to the customers.
3. Underwriting of capital issues: Banks underwrite shares and debentures issued by public limited companies. In this way banks help them in raising capital from the market. Many commercial banks also offer merchant banking facilities to the corporate sector. (any two)
(c) Two characteristics of service are:
1. Services are intangible as they cannot be seen or touched. They have no physical shape.
2. Services cannot be stored for future use.