Risk Tolerance Calculator

✖Public Equity Exposure refers to the level of investment or ownership that an individual or entity has in publicly traded stocks or equities.ⓘ Public Equity Exposure [PEE]			+10% -10%
✖Monthly Gross Income refers to the total amount of income earned by an individual or entity before any deductions, taxes, or expenses are subtracted.ⓘ Monthly Gross Income [MGI]			+10% -10%

✖Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process.ⓘ Risk Tolerance [RT]

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Formula

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Risk Tolerance

Formula

`"RT" = ("PEE"*0.35)/"MGI"`

Example

`"17.5"=("500000"*0.35)/"10000"`

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Risk Tolerance Solution

STEP 0: Pre-Calculation Summary

Formula Used

Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income
RT = (PEE*0.35)/MGI
This formula uses 3 Variables

Variables Used

Risk Tolerance - Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process.
Public Equity Exposure - Public Equity Exposure refers to the level of investment or ownership that an individual or entity has in publicly traded stocks or equities.
Monthly Gross Income - Monthly Gross Income refers to the total amount of income earned by an individual or entity before any deductions, taxes, or expenses are subtracted.

STEP 1: Convert Input(s) to Base Unit

Public Equity Exposure: 500000 --> No Conversion Required
Monthly Gross Income: 10000 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

RT = (PEE*0.35)/MGI --> (500000*0.35)/10000

Evaluating ... ...

RT = 17.5

STEP 3: Convert Result to Output's Unit

17.5 --> No Conversion Required

FINAL ANSWER

17.5 <-- Risk Tolerance

(Calculation completed in 00.004 seconds)

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Created by Kashish Arora

Satyawati College (DU), New Delhi

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Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 20 Risk Management Calculators

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Sortino Ratio

Go Sortino Ratio = (Expected Portfolio Return-Risk Free Rate)/Standard Deviation of Downside

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Modigliani-Modigliani Measure

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Interest Rate Risk

Go Interest Rate Risk = (Original Price-New Price)/New Price

Sterling Ratio

Go Sterling Ratio = (Compound Annual Growth Rate/(Average Maximum Drawdown-10))*-1

Risk Tolerance

Go Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income

Market Risk Premium

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Basis Risk

Go Basis Risk = Future Price of Contract-Spot Price of Hedged Asset

Credit Value at Risk

Go Credit Value at Risk = Worst Credit Loss-Expected Credit Loss

Economic Capital

Go Economic Capital = Earnings at Risk/Required Rate of Return

Calmar Ratio

Go Calmar Ratio = (Average Rate of Return/Maximum Drawdown)*-1

Upside/Downside Ratio

Go Upside/Downside Ratio = Advancing Issues/Declining Issues

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Probability of Default Regression Model

Go Probability of Default = 1/(1+exp(-Linear Combination))

Default Risk Premium

Go Default Risk Premium = Interest Rate-Risk Free Rate

Pain Ratio

Go Pain Ratio = Effective Return/Pain Index

Risk Exposure

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Risk Determination

Go Risk = Risk Impact*Likelihood

Loss Given Default

Go Loss Given Default = 1-Recovery Rate

Risk Tolerance Formula

Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income
RT = (PEE*0.35)/MGI

What is Risk Tolerance?

Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process. It reflects the level of uncertainty or volatility that an individual or entity is comfortable with when making investment or business decisions.
Factors influencing risk tolerance include personal or organizational financial goals, time horizon, investment experience, financial capacity, and psychological factors such as temperament, attitudes, and emotions towards risk.
Understanding risk tolerance is crucial in investment management and decision-making, as it helps individuals and entities determine appropriate investment strategies, asset allocations, and risk management techniques that align with their financial objectives and preferences.

How to Calculate Risk Tolerance?

Risk Tolerance calculator uses Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income to calculate the Risk Tolerance, Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process. Risk Tolerance is denoted by RT symbol.

How to calculate Risk Tolerance using this online calculator? To use this online calculator for Risk Tolerance, enter Public Equity Exposure (PEE) & Monthly Gross Income (MGI) and hit the calculate button. Here is how the Risk Tolerance calculation can be explained with given input values -> 17.5 = (500000*0.35)/10000.

FAQ

What is Risk Tolerance?

Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process and is represented as RT = (PEE*0.35)/MGI or Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income. Public Equity Exposure refers to the level of investment or ownership that an individual or entity has in publicly traded stocks or equities & Monthly Gross Income refers to the total amount of income earned by an individual or entity before any deductions, taxes, or expenses are subtracted.

How to calculate Risk Tolerance?

Risk Tolerance refers to an individual's or entity's willingness and ability to withstand fluctuations or losses in their investment portfolio or decision-making process is calculated using Risk Tolerance = (Public Equity Exposure*0.35)/Monthly Gross Income. To calculate Risk Tolerance, you need Public Equity Exposure (PEE) & Monthly Gross Income (MGI). With our tool, you need to enter the respective value for Public Equity Exposure & Monthly Gross Income and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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