Which of the following BEST defines risk level?

Which of the following BEST defines risk level?

• A. Risk level is calculated by adding together the probabilities of all problem situations and the financial harm that results from them.
• B. Risk level is estimated by multiplying the likelihood of a threat to the system by the chance that the threat will occur and will result in financial damage.
• C. Risk level is determined by a combination of the probability of an undesirable event and the expected impact of that event.
• D. Risk level is the sum of all potential hazards to a system multiplied by the sum of all potential losses from that system.

Answer: (C)

The definition of risk level emphasizes the relationship between the probability of an undesirable event occurring and the expected impact that event would have if it were to happen. This approach is widely accepted in risk assessment frameworks. By characterizing risk as a function of both likelihood and consequence, option C captures the essence of risk analysis effectively. In this context, "probability of an undesirable event" refers to the chance that a specific risk will materialize, while "expected impact" pertains to the severity or extent of the consequences should that event occur. This dual consideration allows for a comprehensive understanding of risk, enabling practitioners to prioritize risks based on the level of threat they pose to project objectives. While other options may touch on elements related to risk assessment, they do not encapsulate the fundamental relationship of probability and impact as cohesively as option C does. For instance, some options may misrepresent how risk is quantified or fail to distinguish adequately between different components necessary for a proper risk level assessment.

The definition of risk level emphasizes the relationship between the probability of an undesirable event occurring and the expected impact that event would have if it were to happen. This approach is widely accepted in risk assessment frameworks. By characterizing risk as a function of both likelihood and consequence, option C captures the essence of risk analysis effectively.

In this context, "probability of an undesirable event" refers to the chance that a specific risk will materialize, while "expected impact" pertains to the severity or extent of the consequences should that event occur. This dual consideration allows for a comprehensive understanding of risk, enabling practitioners to prioritize risks based on the level of threat they pose to project objectives.

While other options may touch on elements related to risk assessment, they do not encapsulate the fundamental relationship of probability and impact as cohesively as option C does. For instance, some options may misrepresent how risk is quantified or fail to distinguish adequately between different components necessary for a proper risk level assessment.