MANAGEMENT

Detailed explanation-1: -Since an unfavourable deviation from the expected always results in loss, we can also define risk as the possibility of occurrence of loss.

Detailed explanation-2: -Pure risk refers to risks that are beyond human control and result in a loss or no loss with no possibility of financial gain.

Detailed explanation-3: -Pure risk is most commonly used in the assessment of insurance needs. For example, should a person damage a car in an accident, there is no chance that the result of this will be a gain. Since the outcome of that event can only result in a loss, it is a pure risk.

Detailed explanation-4: -Both pure risk and speculative risk involve the potential for suffering a loss. Pure risk, however, has no potential for experiencing gain, unlike speculative risk.