Which of the following is an example of speculative risk?

Speculative risk refers to a situation where there is a chance of either gain or loss, typically associated with investments and business ventures. Investing in the stock market is the quintessential example of speculative risk because it involves the potential for profit if the value of the stocks increases, as well as the risk of loss if the stock prices fall. Unlike pure risks, which involve a possibility of loss only (like a car accident), speculative risks involve both possibilities of risk and reward.

In contrast, receiving an insurance payout pertains to a pure risk scenario, where an individual can only experience loss or no loss. Similarly, car insurance premiums are payments made for coverage and do not present a situation where gain is possible; they reflect a structured cost for protection against pure risks. Causing a car accident also fits into the realm of pure risk, as the outcome is primarily a loss situation (damages or costs associated with liability). Thus, investing in the stock market is the only choice that encapsulates the characteristics of speculative risk.