Financial Risk Tolerance
From Open Risk Manual
Definition
Financial Risk Tolerance (also Risk Appetite) in the context of indivuduals (Personal Finance) denotes the degree of risk the individual is willing to accept while pursuing their financial goals.
Importance
Risk tolerance is an important factor in:
- Financial Planning
- Investment Suitability Analysis
- Selection of mortgage type
- Debt versus Savings
- Management of Credit Card Debt
- Other consumer decision issues
See Also
- Risk Appetite (In institutional context)
- Financial Literacy
