Final answer:
Risk severity can be evaluated by estimating potential harm, calculating the frequency or probability of the risk, and prioritizing risks based on their likelihood of occurrence and potential impact on the organization.
Step-by-step explanation:
Risk severity can be evaluated by estimating the harm that could potentially result if a risk becomes a reality. This involves assessing the potential negative consequences that could occur if a risk eventuates. Additionally, calculating the frequency or probability of the risk inherent in a scenario can assist in evaluating risk severity. By determining the likelihood of a risk occurring, we can better understand its potential impact on the organization. Furthermore, prioritizing risks by ranking their likelihood of occurring and their potential impact to the organization is another approach to evaluate risk severity. By analyzing both the probability and impact, we can assign relative importance to different risks and focus on addressing those with higher severity.