Which type of risk allows for the possibility of both gain and loss?

Speculative risk is characterized by the potential for both gain and loss. This type of risk occurs when individuals or businesses engage in activities where the outcome can result in either a profit or a financial setback. For example, investing in the stock market or starting a new business can lead to both positive and negative financial outcomes. Since speculative risks can result in varying consequences, they are a fundamental aspect of many financial and business strategies.

In contrast, pure risk only involves the possibility of loss or no loss, without any potential for gain. This type of risk is often associated with situations such as natural disasters or accidents, where the focus is on preventing loss rather than achieving any gain. Aggressive risk isn’t a standard classification in risk management terminology and doesn't specifically pertain to the outcomes of financial ventures. Managed risk refers more to strategies employed to minimize and control risk rather than its inherent potential for gain or loss.