Risk that is beyond an individual's control, that is, the only possible outcomes are either loss or no loss is known as pure/absolute risk. There is no chance of gain e.g. chance of a home being destroyed by a flood. Speculative risk involves the risk-taker making a decision to take on additional risk that will result in an unknown amount of gain or loss e.g. almost all investments in stocks and bonds have speculative risk but to varying extents.