Exam CISM topic 1 question 29 discussion

A risk analysis includes the analysis of applicable threats by determining its applicability to the organization, its likelihood of impact and the severity of impact thereby deriving to a risk. Answer A is wrong, because the decision how to treat the risk is PARTIALLY determined by the organizations risk appetite. The risk treatment (including factors like an organizations risk appetite) is PART of a comprehensive risk analysis. Therefore, answer B is correct.

At 1st i thought A. After re-reading the question, which "should" be given vs "will" be given. "Should be given" will be determined by Risk Analysis. "Will be given" will be risk appetite. So B for me.

Risk analysis could be a contributing factor to the corporate risk appetite.

Ι think B is correct

B seems like the correct answer. My justification is that risk analysis is required to determine the risk level.

The question is asking a bout a specific asset and specific here is a key work. risk appetite is more generic

Risk appetite

Risk analysis can be performed to determine the level of protection required to be provided to an asset.

Conducting a risk analysis allows for a comprehensive evaluation of the threats, vulnerabilities, and potential impacts associated with specific assets. By analyzing these factors, organizations can make informed decisions about the level of protection required for each asset. Explanation of why other options are not correct: A. The corporate risk appetite: While the corporate risk appetite influences overall risk management decisions, including the allocation of resources and the establishment of risk tolerance levels, it does not directly determine the level of protection for individual assets. Risk appetite provides a high-level framework for decision-making but must be translated into specific risk analysis for each asset.

Risk appetite

Risk analysis gives the level of risk, not level of protection. After a risk analysis, the business then evaluates the level of (inherent/existing) risk against acceptable risk levels (RISK APETITE) to decide the level of protection to be provided, in a manner that the residual risk is within acceptable risk levels.

The Corporate Risk Appetite: it is a broad guideline and does not provide specific details on the level of protection for individual assets.

Majority are wrong. Should be risk appetite

Answer is B: for a particular asset, risk analysis.

I think it's A. Risk analysis is a process that tells you the amount of risk affecting an asset. But ultimately the risk appetite of the business will determine how much money goes into managing the risk (mitigating it, transferring, etc.). Because you can point out the amount of risk, but if the management says "nah, it'll be fine" (to quote The Critical Drinker here :D) that is what's gonna dictate how much is gonna be invested in protecting a particular asset.

While the corporate risk appetite reflects the organization's overall tolerance for risk, it doesn't directly address the specific risks associated with individual assets. A risk analysis is necessary to assess the risks specific to each asset.

A risk analysis involves evaluating the potential threats, vulnerabilities, and impacts associated with an asset to determine the level of risk it poses. By considering the likelihood and potential consequences of various risks, organizations can make informed decisions about the appropriate level of protection needed for specific assets. This process takes into account the organization's risk tolerance, business objectives, and overall risk management strategy. While the corporate risk appetite (option A), threat assessments (option C), and vulnerability assessments (option D) are important components of the risk analysis process, conducting a comprehensive risk analysis provides a holistic view that considers all relevant factors in determining the appropriate level of protection for an asset.