Final answer:
The question involves classifying risk quadrants as pure risks in insurance, which includes problems of moral hazard and adverse selection. However, without a specific model, it's challenging to define exactly which quadrants are pure risks, though hazard risks are often considered pure risks in general risk management.
Step-by-step explanation:
The question relates to the classification of risk quadrants in the context of insurance, where the categorization of risks can lead to two major problems: moral hazard and adverse selection. These issues stem from imperfect information in insurance markets and the challenges faced when attempting to group individuals into different risk categories. Pure risks are those risks where the outcome is either a loss or no loss situation (without a possibility of gain), as opposed to speculative risks which can lead to a gain, a loss, or no change at all. Classic examples of pure risks include natural disasters or untimely death, where insurance is used as a protective measure.
However, the student's question specifically asks about the two risk quadrants classified as pure risks, which might refer to specific models used in risk management or insurance studies. Typically, this model is not clearly defined into quadrants that are used commonly across all risk management literature. Therefore, I must clarify that without a specific model provided, it is challenging to pinpoint exactly which two quadrants are classified as pure risks. However, I can share that in general risk management, risks are often divided into categories such as strategic, financial, operational, and hazard risks, with hazard risks typically falling into the 'pure risks' category. To be sure of the correct answer, one should refer to the specific risk management framework or model being used in the student's course material.