risk-tolerance

Vocabulary Word

Definition

'Risk-tolerance' refers to the degree of risk that an individual or organization can comfortably endure before feeling the need to change their behavior. It's about how much risk you're willing to take without getting anxious.

Examples in Different Contexts

In business strategy, 'risk tolerance' determines how much risk a company is willing to take on in pursuit of its strategic goals. A strategist might comment, 'Analyzing the company's risk tolerance helps us decide which markets to enter and the level of resources to allocate.'

Practice Scenarios

Creative

Scenario:

This modern design concept isn't traditional, but it's groundbreaking and could set us apart.

Response:

Given our risk tolerance, I think we should go for it. However, we should also have a safer design as a backup.

Public-Policy

Scenario:

The proposed policy changes could provide social benefits, but they necessitate a significant shift in our spending patterns.

Response:

Considering our low risk tolerance, we should carefully review these policy changes before implementation.