An organization with a low risk tolerance but high risk appetite is likely to engage in aggressive growth strategies while accepting significant potential losses.
True
False
This statement is incorrect because risk appetite and risk tolerance are closely related concepts. An organization with a high risk appetite is willing to accept more risk in pursuit of higher returns, which correlates with a high risk tolerance. Conversely, a low risk tolerance implies a cautious approach to risk-taking, which would not align with aggressive growth strategies or accepting significant losses. Therefore, an entity with a low risk tolerance would typically also have a low risk appetite, not a high one.
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