Pure Risk

A category of risk in which loss is the only possible outcome; there is no beneficial result. Pure risk is related to events that are beyond the risk-taker's control and, therefore, a person cannot consciously take on pure risk.

This is the opposite of speculative risk.

For example, the possibility that a person's house will be destroyed due to a natural disaster is pure risk. In this example, it is unlikely that there would be any potential benefit to this risk.

There are products that can be purchased to mitigate pure risk. For example, home insurance can be used to protect homeowners from the risk that their homes will be destroyed.

Other examples of pure risk events include premature death, identity theft and career-ending disabilities.


Investment dictionary. . 2012.

Look at other dictionaries:

  • pure risk — n: a risk that can only result in loss compare speculative risk Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • pure risk — See risk …   Big dictionary of business and management

  • risk — speculative risk A possibility of financial loss (whether in absolute terms or relative to expectations) that is inseparable from the opportunity for financial gain. Some of the major categories are market risk, credit risk, liquidity risk, and… …   Big dictionary of business and management

  • Pure red cell aplasia — Classification and external resources ICD 10 D60 ICD 9 284.8 …   Wikipedia

  • Risk dominance — Infobox equilibrium name = Risk dominance Payoff dominance subsetof = Nash equilibrium supersetof = discoverer = John Harsanyi, Reinhard Selten usedfor = Non cooperative games example = Stag huntRisk dominance and payoff dominance are two related …   Wikipedia

  • Pure Yield Pickup Swap — A transaction in which bonds with lower returns are swapped for bonds with higher returns. With a pure yield pickup swap the sole purpose of the transaction is to increase yield, the new bonds will have a similar maturity and risk rating as the… …   Investment dictionary

  • pure interest — noun : interest on capital excluding payment for risk …   Useful english dictionary

  • Speculative Risk — A category of risk that, when undertaken, results in an uncertain degree of gain or loss. All speculative risks are made as conscious choices and are not just a result of uncontrollable circumstances. Speculative risk is the opposite of pure risk …   Investment dictionary

  • speculative risk — n: a risk that may result in either a loss or a gain compare pure risk Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Alternative Risk Transfer — (often referred to as ART) is the use of techniques other than traditional insurance and reinsurance to provide risk bearing entities with coverage or protection. The field of ART grew out of a series of insurance capacity crises in the 1970s… …   Wikipedia

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.