Speculative risk is characterized by what type of potential outcomes?

Speculative risk is associated with situations that involve uncertainty about the outcome, where the potential for both profit and loss exists. This type of risk arises in scenarios like investment opportunities, gambling, or business ventures where the outcomes can vary significantly. Unlike pure risks, which only lead to losses or no change, speculative risks create a landscape where there is a chance to gain as well as a chance to incur a loss. Therefore, recognizing that speculative risk encompasses both potential positive and negative financial outcomes clarifies why the answer indicating the potential for profit or loss is the accurate choice.