Minnesota Real Estate Exam Practice Question
Which of the following is a pure risk?
Correct Answer: C
Rationale: Pure risk involves situations that can only result in loss or no loss, without the possibility of gain. Storing Joan's fur coat at a storage facility represents pure risk; if the coat is damaged or stolen, there is a loss, but no opportunity for profit.
Option A, Ken's collector car investment, involves speculative risk, as the value of the car could appreciate. Option B, the fundraising event with a poker game, also entails speculative risk, as it could yield financial gain or loss based on the game's outcome. Option D, purchasing stock, is similarly speculative, with potential for both profit and loss based on market performance.
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