Using 24 bankers as volunteer subjects, this study examined the effect
s of tolerance for ambiguity, a personality variable, on bankers' perc
eptions of loan risk. Subjects who were classified as scoring high and
low on tolerance for ambiguity on the basis of a median score split o
n MacDonald's version of Rydell and Rosen's scale were given identical
financial information about a company including a footnote disclosure
on an uncertainty regarding pending litigation and a ''subject to'' a
udit qualification. They were requested to estimate interest rate prem
iums they would recommend for a loan application. The subjects' estima
tes of interest rate premiums were used to operationalize loan risk. T
olerance for ambiguity affected subjects' perceptions of loan risk, wi
th individuals low on tolerance for ambiguity requiring higher interes
t rate premiums than individuals high on tolerance for ambiguity.