Final answer:
The correct answer is c. Risk Appetite. Risk appetite refers to the willingness to undertake risk with the opportunity to increase one's return. It is the opposite of risk aversion.
Step-by-step explanation:
The correct answer is c. Risk Appetite. Risk appetite refers to the willingness of an individual or organization to take on risk in order to potentially achieve higher returns. It is the opposite of risk aversion, which is the tendency to avoid or minimize risk.
For example, an investor with a high risk appetite may be willing to invest in volatile stocks that have the potential for large returns, while someone with a low risk appetite may prefer to invest in safer, more stable options like bonds or real estate.
Risk tolerance, on the other hand, is the degree of risk that an individual or organization is willing to accept. It is often used interchangeably with risk appetite, but it can also refer to the ability to bear losses without significant negative impact. Risk mitigation, on the other hand, refers to the actions taken to reduce or minimize risk.