Question

Risk tolerance involves both risk attitude and risk capacity. Risk attitude refers to the organization's _______________________, while risk capacity describes the maximum amount of risk that the organization can assume.

Answer 1

Answer:

Risk attitude refers to the organization's tendency to take or avoid risk.

Explanation:

Risk attitude in an organization refers to the tendency of stakeholders within the organization to either take on risky ventures (risk seeking), or try to avoid uncertain or risky situations by only participating in risk free activities (risk aversion).

Some organizations are risk neutral and indifferent towards taking risks.

Answer 2

Answer:

organization's mental disposition towards risk

Explanation:

Risk tolerance involves both risk attitude and risk capacity. Risk attitude refers to the organization's disposition towards risk, while risk capacity describes the maximum amount of risk that the organization can assume.

Risk attitude have to do with an organizations response or disposition towards risk and there are four types of organizational risk attitudes, these are;  risk averse, risk neutral, risk tolerant, and risk seeker.