what is a risk profile example 
risk profiles can be created in a number of ways but traditionally they begin with a risk profile questionnaire risk profile questionnaires and other strategies which might focus on an investor s environment and life experiences score an individual via various probing questions to come up with a risk profile which is later used by financial advisors both human and ai to help shape a portfolio s asset allocation 8this asset allocation will directly affect the risk in the portfolio so it s important that it aligns well with the individual s risk profile that is their willingness and ability to take on risk willingness to take on risk refers to an individual s risk aversion a risk averse investor for example is someone who says that they essentially never want to see the value of the account decline even if that means missing out on potential capital appreciation if on the other hand an individual expresses a desire for the highest possible return and is willing to endure large swings in the value of the account to achieve it this person would have a high willingness to take on risk 9 they may even be a risk seeker the bottom linea risk profile outlines how much or how little risk an individual or organization is willing and or able to carry an appetite for risk is not the same as a capacity to weather it an overly aggressive investor or company might be willing but not able to take on a certain level of risk whereas one who is overly conservative might be able but not willing to a risk profile is a way to tell that story 