Explain the concepts of risk appetite and risk tolerance with examples. (10) Answer: Risk appetite is the risk of loss that a firm is willing to accept for a given risk-reward ratio (over a specified time horizon, at a given level of confidence). A risk appetite statement could consist of the following financing mechanisms: 1.1 Differentiate between Macro and Micro Integration in Risk Management [13] 1.2 Briefly explain the costs involved in risk