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CGRC · Question #597

Jeff, a key stakeholder in your project, wants to know how the risk exposure for the risk events is calculated during quantitative risk analysis. He is worried about the risk exposure which is too…

The correct answer is C. The probability of a risk event times the impact of a risk event determines the true risk exposure. In quantitative risk analysis, risk exposure for a risk event is calculated by multiplying its probability by its potential impact.

Security and Privacy Governance, Risk Management, and Compliance Program

Question

Jeff, a key stakeholder in your project, wants to know how the risk exposure for the risk events is calculated during quantitative risk analysis. He is worried about the risk exposure which is too low for the events surrounding his project requirements. How is the risk exposure calculated? Response:

Options

  • AThe probability of a risk event plus the impact of a risk event determines the true risk expo sure.
  • BThe risk exposure of a risk event is determined by historical information.
  • CThe probability of a risk event times the impact of a risk event determines the true risk exposure.
  • DThe probability and impact of a risk event are gauged based on research and in-depth analysis.

How the community answered

(29 responses)
  • A
    3% (1)
  • B
    7% (2)
  • C
    86% (25)
  • D
    3% (1)

Why each option

In quantitative risk analysis, risk exposure for a risk event is calculated by multiplying its probability by its potential impact.

AThe probability of a risk event plus the impact of a risk event determines the true risk expo sure.

Adding the probability and impact of a risk event is not the standard mathematical formula for calculating risk exposure in quantitative risk analysis.

BThe risk exposure of a risk event is determined by historical information.

While historical information is used to *estimate* probability and impact, it is not the *calculation method* for determining risk exposure itself.

CThe probability of a risk event times the impact of a risk event determines the true risk exposure.Correct

Quantitative risk analysis uses a formula where the probability of a risk event (often expressed as a percentage or decimal) is multiplied by its potential impact (typically a monetary value) to determine the expected monetary value or risk exposure.

DThe probability and impact of a risk event are gauged based on research and in-depth analysis.

Gauging probability and impact based on research and in-depth analysis describes the *process of input collection*, not the mathematical calculation for risk exposure.

Concept tested: Quantitative Risk Analysis - Risk Exposure Calculation

Source: https://www.pmi.org/learning/library/quantitative-risk-analysis-techniques-6743

Topics

#Risk Management#Quantitative Risk Analysis#Risk Exposure#Risk Calculation

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