## 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
17.5 <-- Risk Tolerance
(Calculation completed in 00.004 seconds)
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## Credits

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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## 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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