When evaluating risk, which two factors are typically considered?

When evaluating risk, which two factors are typically considered?

• A. Time and cost.
• B. Probability of occurrence and potential loss.
• C. Frequency and severity.
• D. Hazard and vulnerability.

Answer: (B)

Evaluating risk centers on two things: how likely the event is to happen and how big the effect would be if it does. This lets you quantify risk as a combination of probability and impact, which is the standard way to prioritize which risks to address. So the best choice is the one that lists probability of occurrence and potential loss. Time and cost are outcomes that can be influenced by risk but don’t define risk itself. Frequency and severity are related concepts, but the conventional evaluation uses probability of occurrence and potential loss. Hazard and vulnerability describe where risks come from rather than how they’re measured.

Evaluating risk centers on two things: how likely the event is to happen and how big the effect would be if it does. This lets you quantify risk as a combination of probability and impact, which is the standard way to prioritize which risks to address. So the best choice is the one that lists probability of occurrence and potential loss. Time and cost are outcomes that can be influenced by risk but don’t define risk itself. Frequency and severity are related concepts, but the conventional evaluation uses probability of occurrence and potential loss. Hazard and vulnerability describe where risks come from rather than how they’re measured.