SEC+ Mod 7 Part 3

What does Single Loss Expectancy (SLE) represent in risk management?

• The total annual financial loss from all risk events.

• The potential financial loss from a single occurrence of a risk event.

• The likelihood of a risk event occurring.

• The cost of implementing risk mitigation measures.

Answer explanation

The potential financial loss from a single occurrence of a risk event.

What does the Annualized Loss Expectancy (ALE) help organizations determine?

• The total number of risk events in a year.

• The potential financial loss from a single risk event.

• Whether investments in risk mitigation measures are cost-effective.

• The likelihood of a risk event occurring.

Answer explanation

The Annualized Loss Expectancy (ALE) helps organizations determine whether investments in risk mitigation measures are cost-effective.

What is the first step in qualitative risk analysis?

• Risk categorization

• Risk assessment

• Risk identification

• Risk prioritization

Answer explanation

The first step in qualitative risk analysis is risk identification, where potential risks are identified and documented.

Which of the following is NOT a step in qualitative risk analysis?

• Risk identification

• Risk categorization

• Risk assessment

• Risk quantification

Answer explanation

Risk quantification is NOT a step in qualitative risk analysis. The other steps include risk identification, risk categorization, and risk assessment.

What is the purpose of risk categorization in risk management?

• To determine the potential impact and likelihood of risks

• To prioritize risks based on their likelihood and impact

• To categorize risks based on predefined criteria

• To document the results of risk analysis

Answer explanation

To categorize risks based on predefined criteria

Which term is used to describe the process of assessing the potential impact and likelihood of risks?

• Risk categorization

• Risk assessment

• Risk prioritization

• Documentation

Answer explanation

The term used to describe the process of assessing the potential impact and likelihood of risks is 'Risk assessment'.

What is typically given higher priority in risk prioritization?

• Risks with lower severity and likelihood

• Risks with higher severity and likelihood

• Risks with moderate severity and likelihood

• Risks with insignificant severity and likelihood

Answer explanation

Risks with higher severity and likelihood are typically given higher priority in risk prioritization.

What is the purpose of documenting the results of risk analysis?

• To categorize risks based on predefined criteria

• To determine the potential impact and likelihood of risks

• To outline identified risks, their qualitative assessments, and proposed risk management strategies

• To prioritize risks based on their likelihood and impact

Answer explanation

To outline identified risks, their qualitative assessments, and proposed risk management strategies

Why is qualitative risk analysis often chosen by organizations?

• It provides a quantitative and cost-effective means of identifying and prioritizing risks

• It provides a qualitative, intuitive, and cost-effective means of identifying and prioritizing risks

• It provides a detailed and precise means of identifying and prioritizing risks

• It provides a broad and complex means of identifying and prioritizing risks

Answer explanation

Qualitative risk analysis is often chosen by organizations because it provides a qualitative, intuitive, and cost-effective means of identifying and prioritizing risks.

What does probability refer to in the context of risk management?

• The likelihood of any event occurring

• The chance or possibility that a specific risk event will occur

• The extent of harm or disruption that the risk event could cause

• The financial, operational, reputational, and regulatory consequences of a risk event

Answer explanation

Probability in risk management refers to the chance or possibility that a specific risk event will occur.