A certain risk has a 1% likelihood of occurrence in the coming year. If the risk is observed, the organization estimates a loss of $1million. The risk is then assessed as
A) 1%
B) $1,000,000
C) 1,000
D) $10,000

Question

Quizplus · Accepted Answer

The risk assessment is not just about the likelihood of occurrence but also includes the impact or loss caused by the risk. Therefore, the correct choice would be the estimated loss or impact which is $1,000,000. However, if we only consider the likelihood, the choice would be 1%. Both A and C are incorrect as they only reflect the likelihood and not the impact.

A Certain Risk Has a 1% Likelihood of Occurrence in the Coming