Which situation does NOT involve "pure risk"?

The correct answer highlights a key distinction in risk types. "Pure risk" refers to situations that involve only the possibility of loss or no loss, without the chance of financial gain. This typically encompasses scenarios that are purely adverse, such as natural disasters, accidents, or health-related issues.

In contrast, when it comes to the loss of money invested in the stock market, this scenario involves not just the potential for loss but also the possibility of gain. Investments are fundamentally associated with speculative risk, where both positive and negative financial outcomes can occur. This dual nature of investment risk differentiates it from pure risk situations, which lack any potential for profit.

The other choices—loss of a house due to a hurricane, loss of crops due to an infestation of parasites, and loss of a company car in an unfortunate accident—are all examples of pure risk. Each of these scenarios presents a situation where loss is the only outcome, without any associated chance of a financial gain. They reflect situations where individuals or entities face the potential for loss but do not have the opportunity to benefit financially from the risk itself.