What type of risk involves the possibility of either loss or gain, often associated with gambling?

Speculative risk is characterized by situations that involve the chance of both loss and gain. This type of risk is often found in contexts such as gambling, investing, and entrepreneurship, where outcomes can vary widely and may result in profits or losses.

In speculative risk scenarios, individuals or businesses engage in activities where they consciously accept the possibility of losing something valuable or gaining a reward, depending on the outcome. For example, when someone gambles, they risk their money with the hope of winning more, which exemplifies the nature of speculative risk.

Understanding that speculative risk is distinct from pure risk, which only involves the chance of loss (without the possibility of a gain), helps clarify the unique attributes of scenarios involving gambling and investment activities. Situations that fall under operational risk and investment risk have different characteristics and contexts, thus reinforcing why speculative risk is the most fitting choice for the scenario described.