Change Implementation Techniques for Creating a Sense of Urgency

Technique 2.76 What is Your Risk Profile?

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Introduction

To understand your risk profile, respond to the following statements with a number from 1 to 5:

1 = strongly disagree

2 = disagree

3 = neither agree nor disagree

4 = agree

5 = strongly agree

Then add your scores to find your risk profile.

Even though the statements are around financial issues, it is still a good indication of your risk profile.

No.

Statements

Answer

1.

Your organisation is willing to choose high risk investments in order to achieve high returns


2.

Your organisation is not bothered if an investment drops 20 percent over 3 to 6 months


3.

Your organisation enjoys reading about financial markets and researching investments


4.

It's possible to beat the market over the long term through careful investing


5.

Your organisation is prepared to borrow money to invest in risky investments, like shares


6.

Staff members of your organisation don't get stressed easily


7.

Your organisation sees risk as equivalent to opportunity in a financial context


8.

Your organisation is comfortable with high return investments even though I know I could lose money


9.

A good investor is willing to buy/sell as priced by the market


10.

Market conditions do not determine how often the organisation checks its portfolio


11.

Your organisation is willing to accept short-term loss for long-term gain


12.

There's not much your organisation don't know about investing


13.

Your organisation is willing to invest a large amount of money in a risky investment for the excitement of seeing whether it goes up or down


14.

Financial assets are no more inherently risky than non-financial ones, such as residential housing


15.

The higher risk of share investing compared with cash is more than made out up for by higher potential returns



Total Score


What does your score mean? The a lower score shows a preference for "risk aversion", and while a higher score infers suggests more of a "risk taker", ie

Score Risk status Score Risk status

15 ‐ 20 Conservative 52 ‐ 63 Adventurous

27 ‐ 38 Cautious 64 ‐ 75 Speculative

39 ‐ 51 Balanced (source: Bina Brown, 2010)


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