QuestionQ466

Risk Assessment

An organization has accumulated cash reserves and is now financially able to take on additional risk while still meeting its objectives. What is this change MOST likely to affect?

  • A Risk tolerance
  • B Risk indicators
  • C Risk capacity
  • D Risk profile
Explanation

Risk capacity is the maximum amount of risk an organization can absorb or bear while continuing to meet its objectives. Increased cash reserves raise its financial ability to withstand risk.

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