Risk Acceptance

The video tutorial discusses the concept of risk appetite, which is the level of risk an organization is willing to accept. It explains how organizations must define their own risk scales, either quantitatively or qualitatively, and consider various criteria such as business, regulatory, operational, technological, financial, and social factors. The criteria for risk acceptance can be expressed as the relationship between expected earnings and estimated risks. Additionally, the tutorial covers how risk acceptance criteria may include future requirements, such as implementing corrective actions to reduce risk to an acceptable level within a defined timeframe.

Explain the relationship between expected earnings and risk estimation.

What role do corrective actions play in managing risk to an acceptable level?