Setting risk appetite: know what you want

oranges-and-apples

Risk appetite is described as the willingness to take on risk in order to pursue business objectives. It therefore signifies the very essence of the risk-return trade-off made by firms. It is inherently linked to the firm’s strategy and business plans. It is the top management of the firm that has the authority, accountability, responsibility and vision to (more or less) unilaterally make choices regarding objectives. More importantly, it is the top management of the firm that has the capacity...

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