Definition Of

Pure risk

Pure Risk involve only a chance of loss.There is only possibility of loss but no possibility of profit.

According to Brigham and Others,” Pure risks are that offer only the prospect of a loss. Examples include the risk that a plant will be destroyed by fire or that a product liability suit will result in a large Judgment against the firm.”

Pure risk is the type of risk where there is only the possibility of loss.

Share it:  Cite

More from this Section

  • Loan Document
    Loan Document is a business contract by which a borrower and lender enter into an agreement. Loans are classified according to the
  • Managed float
    Managed float is an exchange rate regime in which countries attempt to influence their exchange rates by buying and selling currencies (also called a dirty float).
  • Nonaccelerating inflation rate of unemployment
    Nonaccelerating inflation rate of unemployment is the rate of unemployment when demand for labor equals supply, consequently elimination the tendency for the inflation rate to change.
  • Equity reserves
    Equity reserves is the type of bank capital representing funds set aside for contingencies such as losses on assets, legal action against
  • Theory of asset demand
    Theory of asset demand is the theory that the quantity demanded of an asset is (1) usually positively related to wealth, (2) positively
  • Agency agreement
    Agency agreement mean contract between an insurance agent and insurance company that describes the powers, rights, and duties of
  • Establishing new foreign subsidiaries
    Firms can also penetrate foreign markets by establishing new operations in foreign countries to produce and sell their products.