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Question 143 - CTFL-2018 discussion

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Which option BEST describes how the level of risk is determined?

A.
The likelihood of an adverse event happening multiplied by the cost of preventing it
Answers
A.
The likelihood of an adverse event happening multiplied by the cost of preventing it
B.
The consequences of a potential problem multiplied by the cost of possible legal action
Answers
B.
The consequences of a potential problem multiplied by the cost of possible legal action
C.
The impact of an adverse event multiplied by the likelihood of that event occurring
Answers
C.
The impact of an adverse event multiplied by the likelihood of that event occurring
D.
The likelihood and the probability of a hazard occurring
Answers
D.
The likelihood and the probability of a hazard occurring
Suggested answer: C

Explanation:

The level of risk is determined by multiplying the impact of an adverse event by the likelihood of that event occurring1.The impact of an adverse event is the degree of harm or loss that would result from the event, such as financial loss, reputation damage, legal consequences, or safety hazards1.The likelihood of an adverse event is the probability or frequency of the event happening, based on historical data, expert judgement, or statistical analysis1. The other options are not correct formulas for calculating risk. Option A confuses the cost of preventing an adverse event with its impact. Option B confuses the cost of possible legal action with its likelihood. Option D uses two synonyms for likelihood (probability and frequency) instead of combining it with impact.

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asked 18/09/2024
Akshi Raj
42 questions
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