Which of the following is a characteristic of 'pure risk'?

The correct answer highlights that pure risk involves scenarios where there is a possibility of loss or, at best, no loss at all. In the context of risk management and insurance, pure risks are generally associated with situations where outcomes can only be adverse or neutral. For example, risks related to fire damage, natural disasters, or death are classified as pure risks since they can only result in a financial loss or no loss occurring.

This characteristic differentiates pure risk from speculative risk, where outcomes can result in a gain, loss, or no change. The focus on the potential for loss or no loss makes option B the accurate choice, as it encapsulates the essence of pure risk without introducing the possibility of financial gain or other outcomes that would categorize the risk differently.

By understanding pure risk in this manner, it becomes clearer how insurance products are designed to mitigate these specific types of risks, addressing only the scenarios where the insured must prepare for potential losses rather than profits or opportunities.