Explain What Is Meant by Risk Tolerance

question 125

Essay

Explain what is meant by risk tolerance. Comparing a young professional and a retiree, who can have a relatively higher risk tolerance? Why?

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Definitions:

Test Statistic

A calculated value from sample data that is used in a hypothesis test to determine whether to reject the null hypothesis, based on some statistical model.

Confidence Limit

The range within which a population parameter is estimated to lie with a certain confidence level.

Population Variances

The measure of the spread of a population's data points from their mean.

Sample Variances

The measure of variability that quantifies the spread of data points in a sample dataset around the mean.