Which of the following is an example of a pure risk?

A pure risk is characterized by the possibility of loss or no loss, without the possibility of a gain. In this context, natural disasters exemplify pure risk as they can lead to complete loss of property, life, or assets, but there is no potential for financial gain from experiencing a natural disaster. Instead, individuals and businesses face the risk of damage or loss, which can result in significant financial implications.

In contrast, investing in the stock market involves not only the risk of losing money but also the opportunity for profit, distinguishing it from pure risk. Car theft, while also a risk of loss, is generally classified as a speculative risk since it can involve factors like insurance claims and potential recovery of the vehicle, again introducing an element of gain. Therefore, natural disasters stand out as a clear example of pure risk due to their inherent nature of resulting in loss without any chance of gain, aligning perfectly with the definition of pure risks in risk management.