Certified Incident Handler (CIH) Practice Ecam

The formula for calculating quantitative risk involves which two key factors?

1. Probability and Severity

2. Probability and Mitigation

3. Loss and Impact

4. Probability of Loss and Loss

The correct answer is: Probability of Loss and Loss

To understand the formula for calculating quantitative risk, it's crucial to recognize that this calculation typically revolves around establishing a clear relationship between the likelihood of an event occurring and the potential consequences of that event. The correct answer focuses on the Probability of Loss and the Loss itself, as these two elements are essential in determining the financial implications of risk. - The Probability of Loss reflects the chance that a specific risk factor will lead to a loss. This can be quantitatively assessed through historical data or statistical models, providing an essential basis for risk assessment. - Loss represents the actual financial damage or impact that would occur if the risk were realized. This aspect allows organizations to understand the potential monetary consequences associated with a risk scenario. When combined, these factors facilitate a quantitative analysis where calculations can yield the expected monetary value of risk, guiding resource allocation and risk management strategies. In contrast, the other options introduce extraneous factors or different interpretations of risk assessment that do not align as closely with the standard formula for quantitative risk calculation. Choices mentioning mitigation or impact may be relevant in a broader risk context, but they do not address the core quantitative aspects as directly and succinctly as the relationship between probability and loss.