CGRC · Question #217
The amount of risk that an organization is willing to accept can be referred to as: Response:
The correct answer is D. Risk tolerance level. The amount of risk that an organization is willing to accept to achieve its objectives is known as its risk tolerance level. This level guides decision-making in risk management strategies.
Question
The amount of risk that an organization is willing to accept can be referred to as:
Response:
Options
- ARisk analysis
- BRisk mitigation
- CResidual risk
- DRisk tolerance level
How the community answered
(15 responses)- A7% (1)
- C7% (1)
- D87% (13)
Why each option
The amount of risk that an organization is willing to accept to achieve its objectives is known as its risk tolerance level. This level guides decision-making in risk management strategies.
Risk analysis is the process of identifying, assessing, and evaluating risks, not the predefined amount of risk an organization is willing to bear.
Risk mitigation refers to actions taken to reduce the likelihood or impact of a risk, not the level of risk considered acceptable.
Residual risk is the risk that remains after all mitigation efforts have been applied, which may or may not be within the acceptable tolerance level.
The risk tolerance level represents the specific amount of risk an organization is prepared to accept for a given risk or class of risks, aligning with its overall risk appetite and strategic objectives.
Concept tested: Risk tolerance and appetite
Source: https://www.nist.gov/glossary/risk-tolerance
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