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Which statement best distinguishes pure risk from speculative risk?

Pure risk involves loss or no loss, while speculative risk can involve gain, loss, or no change Pure risk applies only to property, while speculative risk applies only to people Pure risk can produce a gain, while speculative risk cannot Pure risk is always uninsurable, while speculative risk is always insurable

Correct Answer:

Pure risk involves loss or no loss, while speculative risk can involve gain, loss, or no change

Explanation:

Pure risk has only the outcomes of loss or no loss. Speculative risk also includes the possibility of gain, so it is generally unsuitable for ordinary insurance.

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