Which term describes the amount of risk a company is prepared to accept to achieve its objectives?

The term that accurately describes the amount of risk a company is prepared to accept to achieve its objectives is "risk appetite." This concept is essential in risk management as it defines the level of risk that an organization is willing to pursue in consideration of its goals and strategic plans. A company's risk appetite can influence its decision-making processes, investment strategies, and overall approach to risk management.

Understanding risk appetite allows companies to align their risk-taking with their capacity to manage those risks, ensuring that they do not take on more risk than they can handle while still striving for opportunities that could lead to growth or improve their competitive position.

Other terms listed, such as risk control, relate to measures taken to reduce or manage risk, while runoff cover pertains to insurance policies that cover claims arising from past incidents. Vicarious liability refers to the legal responsibility one party holds for the actions of another, particularly in an employer-employee relationship, and does not pertain to a company's acceptance of risk for its strategic objectives. These distinctions emphasize the specific nature of "risk appetite" within the broader context of risk management practices in organizations.