How is expected loss calculated when performing risk assessment?
A)Impact times expected loss.
B)Impact times likelihood.
C)Inherent risk times likelihood.
D)Residual risk times likelihood.

Question

Quizplus · Accepted Answer

Expected loss is calculated as the product of the impact of a risk event and its likelihood of occurrence. Therefore, the correct choice is B, which suggests multiplying impact by likelihood to calculate expected loss. Choice A is incorrect as it suggests multiplying impact by expected loss itself, which is not logical. Choice C is incorrect as it suggests multiplying inherent risk (which measures the level of risk before mitigating measures are applied) by likelihood, which does not take into account any risk-reducing measures. Finally, Choice D is incorrect as it suggests multiplying residual risk (which measures the level of risk after mitigating measures) by likelihood, which is not the typical way of calculating expected loss in risk assessment.

How Is Expected Loss Calculated When Performing Risk Assessment