Which of the following represents a pure risk? - ProProfs Discuss
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Which of the following represents a pure risk?



A. Terry places a bet on the outcome of a basketball game.
B. Margaret's dog is temperamental. She s afraid that it will bite a neighbor someday and she will be held responsible.
C. Sam transfers all of his retirement funds into a stock that he expects to rise in value.
D. Cindy, along with 32 others, puts $100 into an Indy 500 race pool at work. The person holding the name of the winning driver will win the entire $3,300.

This question is part of Property and Casualty Insurance License Exam Cram
Asked by Jessica Nicole Ogden, Last updated: Mar 25, 2020

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4 Answers

John Smith

John Smith

Answered Jan 23, 2017

Margaret s dog is temperamental. She s afraid that it will bite a neighbor someday and she will be held responsible.

B is correct. A pure risk is one that involves only the possibility of loss. Choices A, C, and D are examples of speculative risks in which there exists both the possibility of gain and the possibility of loss.
1
 

Shari Immonen

Shari Immonen

Answered Nov 13, 2019

Margaret's dog is tempermental.

 

Patricia Wuillamey

Patricia Wuillamey

Answered Jun 02, 2018

B. Margaret s dog is temperamental. She s afraid that it will bite a neighbor someday and she will be held responsible.

 

ernieo

Ernieo

Answered Feb 25, 2017

The correct answer is B. Margaret's dog is temperamental. She's afraid that it will bite a neighbor someday and she will be held responsible.
Why? It is the only answer that is likely to incur a personal injury or liable damage. Hence, a hazard or pure risk.
 

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