Practice Quiz

CFP Certified Financial Planner Test Prep

Category - Foundation

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Which of the following is the definition of "pure risk"?

  1. Risk in which the chance of loss is equal to the chance of gain
  2. When the value of risk is uncertain
  3. When the only possible outcome is a loss
  4. When the risk sensitivity depends upon contingencies
Explanation

Answer: C - Pure risk is defined as a situation in which loss is the only possible outcome.

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