Risk Appetite

AUD opened 80 cents above USD today. Yay!!

Surge in risk appetite is the alleged reason. Risk Appetite, a wonderful concept, is deceptively simple to comprehend. If you are running an organization, you should know how much risk you can devour if you want to retrieve a decent return.

A bit of Gyaan: (Last benchers can doze off happily. Sweet dreams!)

Say, you are running a bank. You should have defined risk categories and set target levels around these categories, one for the loans department, one for new business ventures, etc. To put in layman terms, an organization needs to have a minimal risk appetite. Remember the no-pain, no-gain concept.

On a usual Sunday afternoon, You are at Marathalli. You enter into Innovative Multiplex and the only matinee show screened is errr, wait…. Mariyadhai. Disappointed, you come out only to meet your college prof who calls you for lunch at Bhagini. It is one of those critical situations in life where you are desperate to make a decision. You end up taking the obvious choice. By evening, you are surprised to find that your risk appetite has paid off. After all, Mariyadhai is better than Sarvam.