What Is Risk Tolerance?
Willingness is a feeling about uncertainty; it is not a bank balance.
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1.What is risk tolerance?
Willingness is a feeling about uncertainty; it is not a bank balance.
2.What is risk capacity?
It asks in numbers and dates; FINRA's investment profile lists risk tolerance next to financial situation and liquidity needs.
3.Which can you recalculate with a pencil, tolerance or capacity?
Capacity rests on amounts and dates; tolerance rests on how someone feels.
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Sources (5)
- Kuzniak, S., Rabbani, A., Heo, W., Ruiz-Menjivar, J., Grable, J. E.: The Grable and Lytton risk-tolerance scale: A 15-year retrospective, Financial Services Review 24 (2015), S. 177-192
- Grable, J., Lytton, R. H.: Financial risk tolerance revisited: the development of a risk assessment instrument, Financial Services Review 8 (1999), S. 163-181
- Guiso, L., Sapienza, P., Zingales, L.: Time Varying Risk Aversion, NBER Working Paper 19284, August 2013
- FINRA Rule 2111 (Suitability): Kundenprofil (Anlegerprofil), FINRA-Regelwerk
- Eigene Rechnung: 10.000
Education only. Not financial advice.