Speculative risks: Price uncertainty with possible gains and losses
What is a speculative risk? Speculative risk is a risk category that ends up in either a gain or loss if undertaken. If we put it that way, isn’t it like any other type of risk? What sets speculative risk apart from the others is the chance that the investment’s value will never appreciate. Investors make these speculative risks out of their own will. They have thought about it, and it was not a result of an unprecedented situation. Speculative risks are not pure risks because, as we’ve said, two things might happen. They can always end up giving you...