Which of the following situations presents a case of pure risk?

Pure risk refers to situations that involve only the possibility of loss or no loss, with no opportunity for financial gain. This type of risk is associated with insurable risks, such as death, fire, theft, and natural disasters.

In the situation where Frank wants to insure his life, he is primarily focused on protecting his family from the financial hardship that could arise in the event of his untimely death. The act of insuring his life represents a pure risk, as the worst-case outcome is a loss (his death) without any chance of financial gain. The insurance he purchases serves as a financial safety net for his dependents, reflecting the nature of pure risk.

The other scenarios involve varying degrees of speculative risk, which include the potential for both loss and gain. In Saul's case, investing in the stock market comes with the possibility of earning a return (gain) or losing his investment (loss). Ralph's decision to gamble with a mortgage on his house also presents the potential for both winning (gain) or losing his money, further illustrating a speculative risk. Similarly, Ron's decision to cash in his life insurance policy to start a business entails both the chance of succeeding (gain) or failing (loss), which does not fit