Groundlearn / Glossary / Risk appetite
Risk appetite
A FRM term, defined in plain English with the distinction examiners test.
What it means
The amount and type of risk a firm is willing to take in pursuit of its objectives, set by the board and cascaded into limits.
The exam angle
Appetite is the choice; capacity is the maximum survivable. Confusing the two is a governance failure, not a semantic one.
Where it appears in the syllabus
- Foundations of Risk ManagementFRM Part I · exam weight 20% · Risk taxonomy, governance, CAPM, multifactor models, financial disasters.
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Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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