Page 13 - EBOOK RISK MANAGEMENT

1.4 Risk Tolerance

Risk tolerance indicates how much risk a person willing to endure. There are three

catagories of risk tolerance: risk averse, risk neutral and risk seeking.

Risk
Seeking
Risk
Neutral

Risk
Averse
• One who love taking risk

• Not afraid of losing money but
expect only to win

• Risk indifferent
• One who is indifferent about risk
• Risk will not influence decision making

• One who dislikes risk

• Avoid the risk
• Prefer lower risk but guaranteed returns

Figure 1.4 Categories of Risk Tolerance

“The biggest risk is not taking any risk... In a world that is
changing really quickly, the only strategy that is guaranteed to
fail is not taking risks.”

- Mark Zuckerberg -

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