Question

What risk-related concept does the following question attempt to measure? In approximately how many years do you plan to retire? (1) 1-5 years; (2) 6-10 years; (3) 11-20 years; (4) 21-30 years; (5) more than 30 years. Group of answer choices

Answer 1

Answer: RISK CAPACITY

Explanation:

RISK CAPACITY is the amount of risk an individual or organization can adopt in order to achieve set goals.

Risk capacity is more OBJECTIVE and is measured mathematically in relation to financial investments.

Risk Capacity is usually compared to Risk Tolerance which is the amount of risk an individual or organization is willing to take. This is more SUBJECTIVE and is simply based on personal feelings/emotions.