If an organisation was willing to invest all its capital in developing and producing a new product that it believed would dominate the market, but that, if it were to fail, would bankrupt them, then the organisation would be said to have:
A) no risk tolerance.
B) some risk tolerance.
C) low risk tolerance.
D) high risk tolerance.
E) None of these responses are correct.

Question

Quizplus · Accepted Answer

The scenario described suggests that the organisation is willing to take on high levels of risk, as they are willing to risk bankruptcy in pursuit of a potentially high reward. Therefore, the organisation would be said to have high risk tolerance.

If an Organisation Was Willing to Invest All Its Capital