Risk Treatment / Risk Response Options

Correct Answer: Risk acceptance

The correct answer is 'Risk acceptance'.

Risk acceptance is a strategy where an organization acknowledges the potential impact of a risk and decides not to take any action to mitigate it. This approach is typically used when the cost of addressing the risk outweighs the potential benefits, or when the risk is deemed acceptable given the organization's risk appetite.

Here's why the other options are incorrect:

'Risk avoidance' involves eliminating the risk entirely by not engaging in the activity that creates the risk. This is not the same as accepting the risk and taking no action.

'Risk transference' involves shifting the risk to another party, often through insurance or contractual agreements. This is an active strategy to manage risk, not a passive acceptance.

'Risk mitigation through controls' involves implementing measures to reduce the likelihood or impact of a risk. This is the opposite of accepting the risk and taking no action.

In the context of information security management, risk acceptance is a valid strategy when the risk is well understood, and the potential impact is deemed acceptable in relation to the cost or complexity of mitigating it. However, it's crucial for organizations to document their decision to accept a risk and regularly review this decision as part of their overall risk management process.

Correct Answer: Risk transfer

Risk transfer is the correct answer for this question. It involves shifting the financial burden of a risk to another party, typically through insurance policies, contracts, or other financial instruments. This option allows an organization to manage risks that are beyond its risk appetite or capacity to handle internally. By transferring the financial consequences, the organization can protect itself from potentially significant losses. The other options are incorrect: Risk acceptance with contingency planning involves acknowledging and preparing for a risk, but not transferring its financial consequences. Risk avoidance through process redesign aims to eliminate the risk entirely by changing how an activity is performed, rather than transferring its financial impact. Risk mitigation by implementing controls focuses on reducing the likelihood or impact of a risk through various measures, but does not involve transferring financial consequences to another party.

Correct Answer: Risk reduction

Risk reduction is the correct answer because it involves modifying the risk to achieve an acceptable level of impact or likelihood. This is a key aspect of risk management in information security. Risk reduction typically involves implementing controls or measures to decrease the probability or impact of a risk. This could include technical controls, administrative policies, or physical safeguards. The other options are incorrect: Risk avoidance is about eliminating the risk entirely, often by not engaging in the activity that creates the risk. This is different from modifying the risk to an acceptable level. Risk sharing through contractual agreements involves transferring part of the risk to another party, such as an insurance company. While this can be a valid strategy, it doesn't involve modifying the risk itself. Risk retention with contingency planning means accepting the risk as it is and preparing to deal with its consequences if it occurs. This approach doesn't involve modifying the risk to achieve an acceptable level.