Risk Appetite Calculation

Owned by amani imtiyas
Last updated: May 26, 2022
1 min read

Please find the below formula on how the Risk Appetite is calculated.

If Risk score > Appetite score for the risk = Out of Appetite  
If Risk score <= Appetite score for the risk = Within Appetite  

Calculation of Risk Score

Risk Score = (L*C)

                  = 2*3 = 6

Calculation of Risk Appetite Score

The appetite score is decided based on the primary risk category selected for the risk.

Risk Appetite Score = 6

Since the risk score (6) and risk appetite score (6) are equal, the risk appetite rating is Within Appetite.