MANAGEMENT

Detailed explanation-1: -Only pure risks are insurable because they involve only the chance of loss. They are pure in the sense that they do not mix both profits and losses. Insurance is concerned with the economic problems created by pure risks. Speculative risks are not insurable.

Detailed explanation-2: -Pure risk is the one which effects you and you only. It can neither be transferred, nor ended altogether. So option (b) is right answer.

Detailed explanation-3: -Pure risk cannot be controlled and has two outcomes: complete loss or no loss at all. There are no opportunities for gain or profit when pure risk is involved. Pure risks can be divided into three different categories: personal, property, and liability.

Detailed explanation-4: -Since there is the chance of a large gain despite the high level of risk, speculative risk is not a pure risk, which entails the possibility of only a loss and no potential for gains.