Management has decided to invest significant capital in a new and innovative large computer system. They understand that they are one of the first organizations to implement this system, but they believe the benefits outweigh the uncertainty over the performance and reliability of the software. This decision best describes which aspect of risk management?
Risk appetite refers to the amount and type of risk that an organization is willing to pursue or retain in order to achieve its goals. In this scenario, management has decided to invest heavily in a new computer system despite the uncertainties. This indicates their willingness to accept a high level of risk in pursuit of potential benefits, which best describes their risk appetite.
Sorry...I meant risk tolerance
risk appetite coz they are implementing something no one has before. They are taking a risk. Rather than ready to tolerate the risk.
Risk appetite is a broad-based description of the desired level of risk that an entity will take in pursuit of its mission. Risk tolerance reflects the acceptable variation in outcomes related to specific performance measures linked to objectives the entity seeks to achieve.
Why not risk appetite ?