Which risk is transferred from the insured to the insurer?

The correct answer is pure risk, as it refers specifically to the type of risk that is insurable. Pure risk involves situations that can result in a loss or no loss but do not allow for the possibility of financial gain. Examples include risks related to accidents, natural disasters, or illnesses. When an individual or entity purchases insurance, they are essentially transferring this pure risk to the insurer, who then agrees to pay for covered losses under the terms of the policy.

In contrast, systematic risk involves broader market factors that impact all investments and is not something that can be transferred through insurance. Financial risk might arise from various uncertainties that can result in a financial loss, but it encompasses a broader spectrum of potential profit or loss scenarios that typically aren't covered by traditional insurance policies. Investment risk generally refers to the chance of losing money on investments, which is again outside the scope of insurable risks. Hence, pure risk uniquely characterizes the kind of risk that insurance is designed to mitigate, solidifying its role as the correct choice in this context.