What distinguishes speculative risk from pure risk?

Speculative risk is characterized by the possibility of both financial gain and loss, setting it apart from pure risk, which only involves the chance of loss without any opportunity for gain. In a speculative risk scenario, individuals or businesses engage in activities where the outcomes could result in profit or a loss, such as investments in stocks, real estate, or entrepreneurial ventures. This dual potential for gain or loss distinguishes speculative risks from pure risks—like natural disasters or accidents—where the only possible outcome is loss.

The other choices relate to different aspects of risk but do not capture the unique financial dimension that speculative risk entails. For instance, while property loss can occur under both speculative and pure risk categories, it does not inherently define speculative risk. Legal actions may arise in various risk contexts but do not differentiate speculative from pure risk. Affects on a broad population can apply to both types of risk without indicating the potential for gain associated with speculative risk.