Which of the following is true about pure risks?
A) The risk/return tradeoff is applicable to pure risks.
B) A firm cannot profit from its exposure to pure risk.
C) Risk managers must be tolerant of negative outcomes related to pure risks.
D) Pure risk is not a source of great concern for risk managers.

Question

Quizplus · Accepted Answer

Pure risks are risks that only have the possibility of loss or no loss, and therefore cannot be profitable for a firm. Risk management strategies are necessary to mitigate potential losses from pure risks.

Which of the Following Is True About Pure Risks