Question 14
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You are defining risk thresholds. What distinguishes risk appetite from risk tolerance?
A. Appetite is quantitative; tolerance is qualitative
B. Appetite is broad and strategic; tolerance is more specific and operational
C. Appetite is technical; tolerance is financial
D. Appetite is set by auditors; tolerance is set by IT
Answer: B. Appetite is broad and strategic; tolerance is more specific and operational
Appetite sets the overall risk posture, while tolerance defines acceptable variations at operational levels.