Answer: Specific investment strategies for each business unit

## Explanation A risk appetite statement is a high-level document that outlines the overall amount and types of risk an organization is willing to accept in pursuit of its strategic objectives. It typically includes: - **Types of risks the company is willing to take** - This is a core component - **Risk management tools it prefers to use** - This helps define the approach to risk management - **Maximum loss it is prepared to bear** - This defines risk capacity and tolerance levels - **Risk tolerance levels for different risk categories** - This provides granularity - **Risk limits and thresholds for monitoring** - This enables operational risk management However, **specific investment strategies for each business unit** would typically be excluded from a risk appetite statement because: 1. **Risk appetite is strategic, not tactical** - It sets the overall framework but doesn't prescribe specific operational decisions 2. **Business unit strategies are operational** - They belong in business plans and operational risk frameworks 3. **Risk appetite provides boundaries** - It tells what risks can be taken, not how to take them 4. **Too granular** - Including specific investment strategies would make the document overly detailed and difficult to maintain The risk appetite statement should remain at a strategic level, allowing business units flexibility in how they operate within the defined risk boundaries.

Author: Tanishq Prabhu