What are the differences between risk tolerance and risk appetite in investing?

[Suba]

Every investment instrument carries a risk, so as investors, we must always learn and understand risk. In the world of investing, we recognize two important concepts related to risk: risk tolerance and risk appetite.

Many people, especially novice investors, often assume these two terms, risk tolerance and risk appetite, are the same or similar. So, do you need clarification and information?

 

[Augusta]

Risk tolerance is the level of risk that an organization can accept per individual risk, whereas risk appetite is the total risk that the organization can bear in a given risk profile,