It is not possible to protect yourself from the consequences of pure risks.
Understand the Problem
The question is presenting a statement related to risk management, particularly about pure risks and the inability to protect oneself from their consequences. It seems to be part of a multiple-choice exercise or examination.
Answer
Pure risks are insurable, allowing risk protection.
The statement can be misleading. Pure risks, which involve only the possibility of loss or no loss, are typically insurable, meaning individuals can protect themselves against the financial consequences of such risks through insurance.
Answer for screen readers
The statement can be misleading. Pure risks, which involve only the possibility of loss or no loss, are typically insurable, meaning individuals can protect themselves against the financial consequences of such risks through insurance.
More Information
Pure risks are events that carry the possibility of either a complete loss or no change, but never a financial gain. Because they only involve potential loss, insurance can often mitigate these risks by transferring the financial burden to an insurer.
Tips
A common mistake is confusing pure risk with speculative risk, which involves the potential for both gain and loss.
Sources
- What Is Pure Risk? Definition, 2 Potential Outcomes, and Types - investopedia.com
- 1.4.1 Speculative and Pure Risks - American Safety Council - course.uceusa.com
- What Is an Insurable Risk? - foundershield.com
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