Which risk classification encompasses activities that can lead to either a gain or a loss?

Speculative risk encompasses activities that can lead to either a gain or a loss. This type of risk involves situations where the outcomes are uncertain and can be favorable or unfavorable. For example, investing in the stock market or starting a new business venture is considered speculative risk because there is potential for profit, but there is also the possibility of losing money.

This distinguishes speculative risk from pure risk, which only presents the possibility of loss with no chance for gain. Pure risk scenarios include events like natural disasters or theft, where the only result can be a financial loss.

Morale hazard refers to the increase in risk that arises from an insured's behavior changing as a result of having insurance. It does not pertain to the potential for gain or loss on its own.

Systematic risk relates to the overall market risk that cannot be eliminated through diversification, which differs from individual activities that can yield both profit and loss.

Understanding speculative risk is crucial when assessing investment opportunities or entrepreneurial endeavors, as it helps evaluate the potential for returns against the inherent uncertainties involved.