Risk Preference

Risk preference refers to an individual's willingness to take or avoid risks when making decisions. Some people are more comfortable with uncertainty and are willing to accept potential losses for the chance of greater gains, known as risk-takers. Others prefer safer options, avoiding significant chances of losing money or resources, known as risk-averse individuals. This attitude influences choices in areas like investments, career moves, or everyday decisions. Understanding one’s risk preference helps align choices with personal comfort levels and financial goals, leading to more satisfying and consistent decision-making.