Answer: generally rises with an extended investment horizon, assuming other factors remain constant.

The **ability (capacity)** to bear risk is primarily assessed through objective factors such as the investor's time horizon, expected income, and wealth relative to liabilities. For instance, an investor with a 20-year horizon has a greater capacity to bear risk compared to one with a 2-year horizon, as there is more time to recover from potential losses or adjust to changing circumstances. In contrast, **willingness** to take risk reflects the investor's psychological comfort with risk and is often gauged through discussions or psychometric questionnaires. This distinction is crucial in analyzing an investor's overall risk tolerance.

Author: LeetQuiz Editorial Team