Final answer:
The correct option is: (4). The risk analysis method using words such as 'likely,' 'unlikely,' and 'rare' to denote likelihood, and 'low,' 'medium,' and 'high' to denote impact, is known as Qualitative analysis. This subjective method is favored when quantitative data is not available and relies on expert judgment.
Step-by-step explanation:
The risk analysis method that uses terms such as 'likely,' 'unlikely,' and 'rare' to describe the likelihood of risks, along with 'low,' 'medium,' and 'high' to describe the impact of risks, is known as Qualitative analysis. This method does not rely on numeric data but rather on the judgment and experience of experts to produce a subjective assessment of risk probabilities and impacts. Qualitative risk analysis is useful when quantitative data is scarce or when it's important to capture expert insights and the nuances of risk that quantitative methods might overlook.
It's important to understand the distinction between different types of risk analysis methods, as each provides different insights. Quantitative analysis, in contrast, uses numerical values and probabilities, whereas semi-quantitative analysis uses a combination of numerical and non-numerical data to rate risks, and semi-qualitative analysis is not a standard term used in risk analysis.