Pure risk involves the chance of financial loss and what?

Pure risk is characterized by situations that present only the possibility of loss or no loss, without the potential for financial gain. In insurance, pure risk is often contrasted with speculative risk, which includes scenarios that can result in either a gain or a loss.

The concept of pure risk is fundamental in the insurance industry, as it underpins the need for insurance coverage. Insurers can effectively underwrite policies based on the assessment of pure risks because they involve predictable outcomes — either a loss occurs, or it does not. Thus, when considering pure risk, one focuses solely on potential losses rather than any opportunities for benefit.

This context clarifies why "no gain" is the accurate choice. The other options, such as gains, deductibles, and hazards, either imply possible financial outcomes or are related to the mechanics of insurance, rather than addressing the core nature of pure risk as it relates to financial loss alone.