Risk tolerance: Difference between revisions

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imported>Doug Williamson
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# The same as 'risk appetite'.
''Risk management.''
# An absolute maximum acceptable level of risk. The risk appetite at a point in time then being identified in turn, within the maximum limit defined by the risk tolerance.


1.
Strictly, an absolute maximum acceptable level of risk.
In this strict sense, risk tolerance is the amount of risk that the firm can actually bear.
This amount of risk could be represented by the firm's capital, or by an amount of capital above a base amount of capital that cannot be put at risk.
2.
The term 'risk tolerance' is also sometimes used in a looser sense, to mean the same as 'risk appetite'.




== See also ==
== See also ==
* [[Enterprise risk management]]
* [[Guide to risk management]]
* [[Risk appetite]]
* [[Risk appetite]]
* [[Risk policy]]
* [[Risk policy]]

Latest revision as of 11:33, 2 April 2019

Risk management.

1.

Strictly, an absolute maximum acceptable level of risk.

In this strict sense, risk tolerance is the amount of risk that the firm can actually bear.

This amount of risk could be represented by the firm's capital, or by an amount of capital above a base amount of capital that cannot be put at risk.


2.

The term 'risk tolerance' is also sometimes used in a looser sense, to mean the same as 'risk appetite'.


See also