Risk Analysis 5.2

Question 1

Qualitative Risk Assessment

Answer 1

• Process of subjectively determining the impact of an event that affects a project, program, or business.

Question 2

Quantitative Risk Assessment

Answer 2

• Process of objectively determining the impact of an event that affects a project, program, or business.

Question 3

Annualized Rate of Occurrence (ARO)

Answer 3

• Representation of an event measured in a standard year.

Question 4

Asset Value (AV)

Answer 4

• The value of an asset to the organization.
• Amount of money it would take to replace an asset.

Question 5

Exposure Factor (EF)

Answer 5

• Percentage of value lost due to an incident.

Question 6

Single-Loss Expectancy (SLE)

Answer 6

• Value of a loss expected from a single event
• Calculated using the following formula
  SLE = AV x EF

Question 7

Annualized Lost Expectancy (ALE)

Answer 7

• Represents the expected losses over the course of a year based on the ALE

ALE = SLE x ARO

Question 8

Number of Impacts of Risk Calculation

Answer 8

• Life
• Property
• Safety
• Finance

Question 9

Risk Likelihood

Answer 9

• A qualitative measurement of risk
• Risk can be classified as Rare, Possible, Almost Certain, etc.,

Question 10

Risk Probability

Answer 10

• A quantitative measurement of risk
• A statistical measurement
• Based on historical performance and the performance we might expect in the future

Question 11

Risk Appetite

Answer 11

• A broad description of risk-taking deemed acceptable
• The amount of accepted risk before taking any action to reduce that risk

Question 12

Risk Appetite Posture

Answer 12

• Qualitative description for readiness to take risk
• Conservative, neutral, and expansionary

Question 13

Risk Register

Answer 13

• A list of the risks associated with a system
• Identify and document the risk associated with each step

Question 14

Risk Tolerance

Answer 14

• An acceptable variance (usually larger) from the risk appetite

Question 15

Key Risk Indicator

Answer 15

• Part of the risk register
• Identifies risk that could impact the organization

Question 16

Risk Owners

Answer 16

• Each key risk indicator is assigned to someone to manage the risk

Question 17

Risk Threshold

Answer 17

• The cost of mitigation is at least equal to the value gained by mitigation.