The premature death of an individual is an example of a
A)pure risk.
B)speculative risk.
C)fundamental risk.
D)physical hazard.

Question

Quizplus · Accepted Answer

The premature death of an individual is an example of a pure risk because it involves only the possibility of loss with no possibility of gain. It is also an insurable risk, as it meets the criteria of being a definite and measurable risk of loss, with a large number of similar exposure units. Speculative risk involves the possibility of both gain and loss, such as gambling or investing in the stock market. Fundamental risk refers to risks that affect the entire economy, such as inflation or recession. Physical hazard refers to the presence of a tangible object or condition that increases the chances of loss, such as icy sidewalks or faulty wiring.

The Premature Death of an Individual Is an Example of a