Knowing the potential financial loss an organization is willing to suffer if a system fails is a determination of which of the following?

Question

Options

• ACost benefit
• BRisk appetite
• CBusiness continuity
• DLikelihood of impact

• A
  14% (5)
• B
  77% (27)
• C
  6% (2)
• D
  3% (1)

Explanation

Risk appetite (B) defines how much financial loss an organization is willing to accept if a system fails - it's the threshold of tolerable risk that guides security and business decisions.

• A (Cost benefit) is wrong because cost-benefit analysis compares the cost of a control against the loss it prevents - it's a calculation, not a tolerance threshold.
• C (Business continuity) is wrong because BC focuses on keeping operations running during/after a disruption, not on quantifying acceptable financial loss.
• D (Likelihood of impact) is wrong because that describes the probability or severity of a threat occurring, not the organization's willingness to absorb losses.

Memory tip: Think of "appetite" as hunger - it answers how much pain (loss) you're willing to stomach. If you see "willing to accept/tolerate/suffer" in a question, that's always risk appetite.

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