In qualitative risk analysis, risk is calculated in terms of what?

In qualitative risk analysis, risk is fundamentally assessed by evaluating the potential impact and the likelihood of risk events occurring. The chosen answer illustrates a common mathematical approach to quantify risk, which is the product of the probability of loss and the potential loss itself.

This approach reflects not only the likelihood of an incident happening but also the severity of the consequences if that incident occurs. By calculating risk in this way, decision-makers can prioritize risks and allocate resources more effectively, focusing on those with the highest potential impact. This quantitative view allows organizations to develop a more informed risk management strategy, fostering better preparedness and response initiatives.

The other options pertain to different aspects associated with incidents but do not encompass the holistic evaluation of risk in the context of qualitative analysis. For example, counting incidents per month provides mere frequency data without considering the impact or likelihood of significant losses. Similarly, assessing the costs of preventing incidents or the time taken to detect them are valuable metrics but do not directly quantify risk in terms of potential losses or their probabilities.