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What are the easy explanations of the above words with examples please? Thanks in advance.
Well you can incorporate these three terms in one to explain. For example you will start from risk appetite which means that how much risk the business will accept then you talk about risk attitude of the organization which included the overall character of the board, in terms of the board being risk averse or risk seeking. You can also include here risk profile of the company whther its risk averse or risk seeking company etc.
I mean you can write alot in this topic if there is a senerio based question. June 2012 is a good example to understand what to write
Risk Appetite of a company: How much risk the company is willing to take
Risk profile is similar to risk appetite i.e. how much risk is the company ready to acceptand risk attitude is the approach/attitude of a company or a person towards risks.
he could be either
risk averse- not willing to take high risks,
risk seeking- willing to take higher risks for higher returns or
risk neutral.This selection will depend upon a number of internal and external factors of the company as well as the company’s environment. It will also depend upon relative risks and likelihood of risks materializing into potential hazards. hope this helps 🙂
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