What type of risk is characterized by the possibility of gain and is consciously taken?

Speculative risk is defined as a type of risk where there is a possibility of both gain and loss, and it is consciously undertaken by individuals or organizations. This contrasts sharply with pure risk, which only involves the potential for loss without any chance of financial gain.

Examples of speculative risks include investing in the stock market, starting a new business, or real estate speculation. Those engaging in these activities understand they could either experience a profit or incur a loss, thus they make a conscious decision to take on this risk with the hope of benefiting from a positive outcome.

In contrast, pure risk involves scenarios like natural disasters or theft, where outcomes are limited to losses. Other types of risk mentioned in the question, such as adverse risk and insurance risk, do not align with the characteristics described for speculative risk. Adverse risk typically refers to the increased likelihood of loss resulting from a particular situation, while insurance risk focuses on the uncertainties associated with insuring against specific events.