Certified Governance Risk and Compliance (CGRC) Practice Exam

A pure risk is characterized by the potential for a negative outcome that does not offer a possibility of gain or profit; it strictly involves the likelihood of loss or damage. This type of risk typically corresponds with situations where only adverse consequences can occur, such as in cases of accidents, natural disasters, or health-related issues. Given that pure risks are strictly about loss, they align with the notion of situations such as loss of life or limb, where the only possible outcome is detrimental. In contrast, the other options suggest characteristics of risk that do not strictly meet the criteria of being a pure risk. For instance, events that cannot be avoided due to work order encompass both negative and potentially neutral or positive outcomes, which expands beyond what can be categorized as purely negative. Similarly, risks created by responses or those that arise from errors are generally considered different types of risks that incorporate both potential gains and losses, signifying a broader risk landscape. Thus, the definition of a pure risk centers solely around negative outcomes, emphasizing its intrinsic nature of solely involving the threat of loss.