Which of the following is an example of Pure Risk?

Pure risk refers to situations that present only the possibility of loss or no loss, without the chance for financial gain. In the context of the choices provided, owning a home is a classic example of pure risk. When you own a home, you face risks such as damage from fire, theft, or natural disasters. These scenarios can result in financial loss, but there is no opportunity for financial gain from simply owning the home itself.

In contrast, investing in real estate involves the possibility of financial gain or loss, as property values can increase or decrease over time, which categorizes it as speculative risk. Driving a car also entails potential loss (like accidents), but it additionally includes the possibility of earning money, such as through ridesharing services. Gambling inherently includes both the chance of financial loss and potential gain, which aligns it with speculative risk rather than pure risk. Thus, owning a home clearly fits the definition of pure risk, standing out among the options provided.