Which term best describes the chance of loss?

The term that best describes the chance of loss is pure risk. Pure risk refers to situations where there are only two possible outcomes—there is either a loss or no loss at all. This type of risk is generally associated with events that cannot be controlled, such as natural disasters, accidents, or health-related issues. In these instances, the potential for profit does not exist; thus, it strictly involves the possibility of loss.

In contrast, investment risk, for example, involves the potential for both gains and losses, as it pertains to opportunities where success can lead to profit. Error risk often relates to the possibility of mistakes that could lead to a loss, but it does not encompass the broader category of risk involving loss without the potential for a corresponding gain. Speculative risk, on the other hand, involves situations where outcomes can result in either a profit or a loss, which distinguishes it from pure risk. Thus, when focusing solely on the chance of loss without any potential for gain, pure risk is the most fitting term.