CMFAS M8A Disclosure & Suitability for Complex CIS question: risk profiling

In risk profiling, a client's risk 'CAPACITY' differs from risk 'TOLERANCE' in that capacity is about:

• A The client's financial ABILITY to absorb losses; tolerance is WILLINGNESS to accept them
• B The client's WILLINGNESS to accept losses; tolerance is the ABILITY to absorb them
• C The amount of return the client NEEDS to reach a goal; tolerance is past experience
• D The adviser's own risk appetite; tolerance is the client's appetite for the same risk