Which category of risk has the outcomes of a loss, a break even or a gain?

The category of risk that encompasses the potential outcomes of a loss, a break even, or a gain is known as speculative risk. Speculative risks are those where the uncertain variable involves a chance of gain in addition to a chance of loss. This characteristic differentiates speculative risks from pure risks, which only involve the possibility of loss or no loss, but not gain.

In the context of insurance and risk management, speculative risks are often associated with investments or business ventures where profits can be realized, making them essential for economic growth and entrepreneurial activities. Examples of speculative risks include stock market investments, where an investor can either gain or lose money depending on market movements.

Other categories of risk, such as fundamental risk and particular risk, involve uncertainties that do not offer the potential for gain. Fundamental risks are broad and affect many individuals or organizations simultaneously, like natural disasters or economic recessions, while particular risks are specific to an individual or entity, such as theft or damage to personal property. Pure risks are those that involve only scenarios of loss or no loss, such as health issues or accidents, and do not provide any opportunity for profit.