GAQM ISO-31000-CLA Exam - Topic 5 Question 24 Discussion

Actual exam question for GAQM's ISO-31000-CLA exam

Question #: 24
Topic #: 5

The Chief Risk Officer within a large manufacturing organisation has been asked by the Board of Directors to provide an example of a pure risk. A suitable example would be

Aa fire occurring in a new manufacturing process line.

Bentering into a contract to purchase a new factory.

Cmaking a strategic decision that affects the long-term future of the organisation.

Dthe purchase of a currency derivative.

Show Suggested Answer

Suggested Answer: A

A fire occurring in a new manufacturing process line is an example of a pure risk, which is a situation that can only end in a loss12. For example, the fire could damage property, injure workers or disrupt operations.

by Annamae at Mar 06, 2026, 08:16 AM

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Sarah

1 day ago

I disagree, entering a contract isn't a pure risk.

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Shawn

6 days ago

A fire in the manufacturing line is definitely a pure risk!

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Asha

11 days ago

I practiced a question similar to this, and I think pure risks are definitely about losses without any potential gain. So, I’d go with A too.

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Verona

17 days ago

I feel like option A makes the most sense, but I’m a bit confused because I thought pure risks were more about natural disasters or accidents.

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Beata

22 days ago

I remember discussing pure risks in class, and I’m not sure if the fire is the only example. Isn’t entering a contract also risky, but more of a speculative risk?

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Alyce

27 days ago

I think a pure risk is something that can only result in a loss, so I’m leaning towards option A, the fire.

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