What does the term 'risk tolerance' refer to? The performance of a portfolio The actual risk of an investment The ability to recover from financial loss The level of risk an investor is willing to take

The term 'risk tolerance' refers to the level of risk an investor is willing to take. It is a measure of the degree of variability in investment returns that an individual is willing to withstand in order to achieve a desired level of return. Risk tolerance can vary from person to person and can be influenced by factors such as age, income, investment goals, and personal comfort with uncertainty.