TARGET RISK Meaning and
Definition
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Target risk refers to the level of risk that an individual or organization is willing to accept or tolerate in order to achieve their desired objectives or goals. It is the level of risk that a person or entity intentionally chooses to expose themselves to, recognizing that there may be potential negative outcomes or losses associated with that risk.
Target risk is an integral part of risk management strategies, as it helps individuals and organizations establish a balance between potential rewards and potential losses. By defining a target risk, individuals and organizations can set limits on the amount of risk they are willing to take on in pursuit of their objectives.
The determination of target risk involves several factors, including the risk appetite, risk tolerance, and risk capacity of the individual or organization. Risk appetite refers to the willingness to take on risk, while risk tolerance refers to the ability to withstand potential losses. Risk capacity, on the other hand, considers the financial and operational capabilities to manage and absorb risk.
Setting a target risk allows individuals and organizations to make informed decisions regarding risk-taking activities. It helps them identify and prioritize risks, allocate resources effectively, and establish risk management strategies to minimize the likelihood and impact of potential adverse events.
In summary, target risk is the level of risk that an individual or organization intentionally targets or accepts in pursuit of their objectives. It is a strategic decision that considers risk appetite, risk tolerance, and risk capacity, and aims to strike a balance between potential rewards and potential losses.
Common Misspellings for TARGET RISK
- rarget risk
- farget risk
- garget risk
- yarget risk
- 6arget risk
- 5arget risk
- tzrget risk
- tsrget risk
- twrget risk
- tqrget risk
- taeget risk
- tadget risk
- tafget risk
- tatget risk
- ta5get risk
- ta4get risk
- tarfet risk
- tarvet risk
- tarbet risk
- tarhet risk
Etymology of TARGET RISK
The word "target" comes from the Middle English word "targette", which referred to a small shield used for defense or as a mark for archery practice. It originated from the Old French word "targe" and ultimately from the Old English word "targe". The word "risk" comes from the Italian word "risco" or "riscio", which means "danger" or "hazard". It was derived from the Latin word "risicum" or "risicum" meaning "peril". When these two words are combined, "target risk" refers to the specific risk or level of risk that an individual or organization aims to address or mitigate.
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