How does Knowledge and Experience affect Risk Capacity?

An investor's Knowledge and Experience does not directly affect their Risk Capacity. Risk Capacity is an investor's financial ability to take risk; this is not affected by their knowledge or experience.

However, a high Risk Capacity can increase an investor's Suitable Risk Level. This increase will be capped if an investor is less familiar with the world of investing, or less comfortable with basic investment principles.

In due course, as the investor becomes more knowledgeable and experienced, this cap is reduced, ultimately disappearing entirely.