In the context of risks to new businesses, identify a true statement about risk tolerance.
A)What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.
B)Risks must be determined by entrepreneurs based on the findings of focus groups with other entrepreneurs in the same industry.
C)In new markets, entrepreneurs must be willing to put up with risks that outweigh their personal risk tolerance.
D)Entrepreneurs can avoid a majority of the risks associated with new start-ups by allowing competitors to invest in their new businesses.

Question

Quizplus · Accepted Answer

Risk tolerance is subjective and varies from person to person. It is up to the entrepreneur to determine what level of risk they are comfortable with based on their own business and personal goals, financial situation, and past experiences. Focus groups with other entrepreneurs may provide some insight, but ultimately the decision should be based on the individual's own assessment of risk. Option C is not necessarily true, as entrepreneurs should not take on risks that exceed their personal risk tolerance, even in new markets. Option D is not a viable option as allowing competitors to invest in a new business would not necessarily mitigate risks associated with start-ups.

In the Context of Risks to New Businesses, Identify a True