Risk Attitude

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The company’s risk attitude is its willingness to take on risks in order to obtain profits.

Example: Virgin Galactic, aiming to provide commercial flights in space, is risk-seeking. They are investing heavily in developing new products and technologies. Whether they will be successful is highly uncertain, but they are betting they will succeed and earn a substantial return on their investment.

Note: Often, risk attitude is a subjective description ranging from “risk-averse” to “risk-seeking.” One way of describing risk attitude is to determine how much (time, dollars, people) the organization is willing to invest at different risk levels.

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