Risk Tolerance refers to the acceptable level of variation of standard or type of risk is acceptable to achieve the objectives that alredy set.The acceptable level of risk that can be measured and the best way of measuring in the same unit as an objective that correlative.For example, the organization aims to increase revenue by 5% within 2 years to determine the level of acceptable risk may be defined at a rate of 4% - 6%. By the ratio, it's defined as a level acceptable to the organization while still achieve the objectives. Grable, J., Lytton, R., & O'Neill, B. (2004). Projection bias and financial risk tolerance.The Journal of Behavioral Finance,5(3), 142-147. Hello

my classmate just answered me after I posted the answer you gave me and Iwant to respond to his answer. I'm going to send you first what you sent me and second his answer.

what you sent me:

Risk tolerance refers to the measure of the amount of risk is willing to handle. This in other words is the level of uncertainty that an investor is willing to handle. This risk refers to the amount of money on an investment that could be lost in the event of an investment turning out as opposite of what was expected. In order to understand risk tolerance it is important to understand what risk capacity is because these two go together. Risk capacity on the other hand refers to the amount of risk that the investor has to take for the goals set aside to be achieved (Chandra, 2005.

Understanding an individuals risk tolerance is very important because it is this degree that determines if an investor is going to invest in a particular activity or not. If an individuals risk tolerance is very little then such an individual will not be expected to invest a lot like it is the case with an individual whose risk tolerance is high (Haynes, 2010). This means that an individual will make major decisions based on their risk tolerance degree. The kind of investments that are considered by individuals with little risk tolerance are those that seems so sure to be successful. This means that such individuals may miss out on very important investments that would give very good returns because of their fear.

It is true to say that different people have different degrees of risk tolerance. Some people have very little degree of risk tolerance while others have zero degrees of risk tolerance. It is therefore important to determine the degree of risk tolerance that an individual can handle (Haynes, 2010).One way that individuals can determine their degree of risk tolerance is by taking a questionnaire. In order to access the degree of risk tolerance investors are advised to take a questionnaire that makes it clear of how much risk a particular investor is willing to handle.

References

Chandra, P .2005. Projects planning, analysis, financing, implementation and review. New Delhi: Tata McGraw-Hill publishing company limited

Haynes, M. E, 2010. Project management, a practical guide for success, revised edition. California, Crisp publication, Inc.

what he responded to my posting:

Risk Tolerance refers to the acceptable level of variation of standard or type of risk is acceptable to achieve the objectives that alredy set.The acceptable level of risk that can be measured and the best way of measuring in the same unit as an objective that correlative.For example, the organization aims to increase revenue by 5% within 2 years to determine the level of acceptable risk may be defined at a rate of 4% - 6%. By the ratio, it's defined as a level acceptable to the organization while still achieve the objectives. Grable, J., Lytton, R., & O'Neill, B. (2004). Projection bias and financial risk tolerance.The Journal of Behavioral Finance,5(3), 142-147.