Analyzing Risk Tolerance for Projects
When you are analysing risk tolerance for projects, you are trying to discover an acceptable level of risk that is acceptable to a project manager or key stakeholders when the investment is compared to the potential payoff.
When analysing risk tolerance for projects, you need to know that some stakeholders may perceive risk difficulty only conservative, low-risk projects that are similar in nature and scope to many past successes. Other stakeholders may seek out high-risk ventures in uncharted territory; they may be willing to risk a great amount of capital on a speculative project with the potential for large returns.
#1 RISK AVERTER
They are not likely to take a risk that is considered high risk. They will always want to avert risk as much as possible.
#2 RISK SEEKER
They have to accept as an uncertain outcome and may be willing to take the high risk regardless of the consequences. These categories of risk-takers are ready to try anything new. They are always ready to accept any outcome of their initiatives.
#3 RISK NEUTRAL
In their own case, tolerance is proportional to the amount of money at stake. If the amount is bigger than what the company can afford, they may decide not to embark on such a project.
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