i.1.3 What Is the Agency’s Tolerance for Risk?

i.1.3 What Is the Agency’s Tolerance for Risk?

Risk tolerance for an investor is the degree to which that investor can absorb volatility, or more specifically, a decline in asset value. It applies equally to investments made by public agencies in new programs, services, or facilities. For a public agency, risk tolerance represents how much the agency and its elected or appointed leaders are willing to risk NOT fully or effectively delivering programs, services, or facilities.