Morton is discussing with his insurance agent the possibility that he might lose his building and equipment in the event of a fire or windstorm. Should that happen, Morton's company would not be able to earn revenues. These two people are discussing _____ risk.
A) disaster
B) pure
C) business
D) market

Question

Quizplus · Accepted Answer

The discussion between Morton and his insurance agent is focused on the possibility of losing the building and equipment, which would result in the company being unable to earn revenues. This type of risk is called pure risk, which refers to situations where there is only the possibility of loss or no loss at all. The other options do not accurately capture the type of risk being discussed.

Morton Is Discussing with His Insurance Agent the Possibility That