Which of the following describes pure risk?

Pure risk is defined as a situation where there is a chance of loss or no loss, with no opportunity for profit. This type of risk is typically insurable because it is predictable and measurable. For example, the risk of a house being damaged by fire presents a pure risk; the homeowner would either incur a loss (if the house is damaged) or experience no loss (if the house remains undamaged).

The other options do not accurately describe pure risk. The first option refers to insurable risks with potential profit, which pertains to speculative risks rather than pure risks. The second option suggests a guarantee of financial return, which is inherently inaccurate in the context of pure risks, as the focus is solely on loss potential. The final choice mentions risk factors influenced by market conditions, relating more to speculative risks that involve potential gains or losses due to external economic factors rather than the binary outcome of pure risk scenarios.