PSI Life Exam Practice Test

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Prepare for the PSI Life Exam. Utilize flashcards and multiple-choice questions with detailed hints and explanations. Ensure success on your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Which of the following is not considered a pure risk?

Injury in an accident
Death from illness
Damage to property from a natural disaster
Investment loss in the stock market

The correct answer is: Investment loss in the stock market

Pure risk refers to situations where only the possibility of loss or no loss exists, without any opportunity for profit. In the context of the options provided, investment loss in the stock market is classified as a speculative risk. This type of risk involves the potential for both loss and gain, as investors can experience increases in their investment's value alongside potential losses. On the other hand, the other options—injury from an accident, death from illness, and damage to property from a natural disaster—represent scenarios that involve potential loss only, fitting the definition of pure risk. In each of these cases, if the unfortunate event occurs, it will result in a negative outcome without the possibility of any financial gain. This distinction further highlights why investment loss in the stock market is not a pure risk, making it the correct answer for this question.