Question

Which of the following is a goal of risk management?

A. To identify the correct cost balance between risk and controls
B. To eliminate risk by implementing controls
C. To eliminate the loss associated with risk
D. To calculate value associated with residual risk

Answer 1

The goal of risk management is to find the optimal balance between the cost of implementing controls and the potential benefits in order to reduce and control risks to an acceptable level.

Step-by-step explanation:

The goal of risk management is to identify the correct cost balance between risk and controls. While it's not possible to eliminate all risks, risk management aims to minimize the potential negative impact risks can have on an organization. This involves establishing a balance between the cost of implementing controls and the potential benefits those controls will deliver. Eliminating all risks is impossible, as some level of residual risk will always remain. Risk management does not solely focus on elimination of risks, nor is its primary goal to calculate the value associated with residual risk; rather it is about reducing and controlling risk to an acceptable level.