What is considered to be a pure risk?

A pure risk is defined as a situation that presents only the possibility of loss or harm, with no opportunity for financial gain. In this context, a chance of loss without any potential for gain aligns perfectly with the concept of pure risk. For instance, risks associated with natural disasters or theft represent pure risks because the outcome can only result in a loss; there is no corresponding opportunity to profit from the situation.

This understanding distinguishes pure risks from speculative risks, where there is potential for both loss and gain. Options relating to speculative investments or conditions that guarantee a gain do not fit the definition of pure risk, as they involve uncertainty and opportunities beyond mere loss. Thus, the correct answer highlights the essence of pure risk, which is solely concerned with the chance of loss.