CISM Information Security Risk Management — 20 Questions

Question 1

A security manager is evaluating risk treatment options for a high-risk vulnerability. Drag each option to the correct risk treatment category.

Options:
- Apply a vendor patch
- Purchase cyber insurance
- Decommission the system
- Accept the risk with formal sign-off
- Install a WAF (Web Application Firewall)

Categories:
- Mitigate
- Transfer
- Avoid
- Accept

Question 2

A company is choosing a risk assessment methodology for a new cloud-based application. The CISO prefers a method that uses monetary values and numerical probabilities to compute annual loss expectancy. Which methodology should be selected?

Accepted Answer

Quantitative risk assessment using SLE, ARO, and ALE. The CISO requires a methodology that uses monetary values and numerical probabilities to compute annual loss expectancy (ALE). Quantitative risk assessment directly calculates ALE using the formula ALE = SLE × ARO, where SLE (Single Loss Expectancy) is expressed in monetary terms and ARO (Annualized Rate of Occurrence) is a numerical probability. This matches the requirement precisely, whereas qualitative methods (like OCTAVE Allegro or risk matrices) use subjective scales, not hard monetary figures.

Answer

OCTAVE Allegro methodology

Answer

NIST SP 800-30 Revision 1 risk assessment process

Answer

Qualitative risk assessment using risk matrices

Question 3

A regional hospital is required to comply with the Health Insurance Portability and Accountability Act (HIPAA). During an internal audit, it was discovered that patient electronic health records (EHRs) are transmitted over the internet without encryption. The risk manager has been asked to recommend a risk treatment. Which action should be prioritized to address this finding?

Accepted Answer

Implement encryption for all data in transit. Implementing encryption for data in transit directly addresses the identified vulnerability and is a mandatory safeguard under HIPAA. Option B is incorrect because accepting this high-risk condition would likely violate regulatory requirements. Option C is incorrect because insurance does not reduce the risk of non-compliance. Option D is overly drastic and would disrupt operations without addressing underlying security.

Answer

Accept the risk because the likelihood of interception is low

Answer

Purchase cyber insurance to cover potential data breach costs

Answer

Discontinue all electronic transmission of patient data

Question 4

A financial institution is implementing a new online banking platform. The risk assessment identified that the authentication module has a high likelihood of exploitation due to weak password policies. The risk owner has decided to implement multi-factor authentication (MFA) to reduce the risk. This is an example of which risk response strategy?

Accepted Answer

Risk mitigation. Implementing multi-factor authentication (MFA) reduces the likelihood or impact of a security risk by adding additional authentication factors (e.g., something you know, something you have, something you are) beyond a weak password. This directly aligns with risk mitigation, which seeks to decrease the residual risk to an acceptable level through controls. The decision does not eliminate the risk entirely (avoidance), accept it without action, or transfer it to a third party.

Answer

Risk avoidance

Answer

Risk acceptance

Answer

Risk transfer

Question 5

An organization has a risk appetite that allows for a maximum residual risk level of 'medium' for all operational risks. A new project introduces a risk with inherent risk level 'high' and control effectiveness rated as 'partially effective'. The risk owner proposes to accept the risk. As the CISM, what is the best course of action?

Accepted Answer

Insist on additional controls to reduce residual risk to at least 'medium'.. The organization's risk appetite mandates that residual risk must be at 'medium' or lower. With an inherent risk of 'high' and controls rated 'partially effective', the residual risk remains above the acceptable threshold. Therefore, the best course is to insist on additional controls to bring residual risk down to at least 'medium', ensuring compliance with the risk appetite.

Answer

Accept the risk since the risk owner has agreed.

Answer

Transfer the risk to an insurance company.

Answer

Recommend revising the risk appetite to accommodate this risk.

Question 6

During a risk assessment, a CISM identifies that the organization's data backup process has a single point of failure. The backup server is located in the same data center as the primary server. Which risk response is most appropriate?

Accepted Answer

Mitigate by moving the backup server to a geographically separate location.. Moving the backup server to a geographically separate location directly eliminates the single point of failure by ensuring that a localized disaster (e.g., fire, flood, power outage) at the primary data center does not simultaneously destroy both the primary and backup data. This is a classic risk mitigation strategy that reduces the likelihood and impact of data loss, aligning with the principle of geographic redundancy for disaster recovery.

Answer

Transfer the risk by purchasing business interruption insurance.

Answer

Avoid the risk by discontinuing the backup process.

Answer

Accept the risk because the cost of mitigation is high.

Question 7

A multinational corporation is assessing the risk of data breaches from third-party vendors. The CISM is tasked with selecting a risk treatment strategy. The organization has a low risk appetite for data breaches. Which strategy should be prioritized?

Accepted Answer

Avoid the risk by not engaging vendors that cannot meet security requirements.. Given the organization's low risk appetite for data breaches, the most appropriate strategy is to avoid the risk entirely by not engaging vendors that cannot meet security requirements. This aligns with the principle that when risk exceeds the acceptable threshold, avoidance is the prioritized treatment. Avoidance eliminates the risk source, whereas other strategies like mitigation or transfer still retain some residual risk that may be unacceptable.

Answer

Mitigate the risk by conducting regular vendor audits.

Answer

Transfer the risk by requiring vendors to have cyber insurance.

Answer

Accept the risk because third-party risks are unavoidable.

Question 8

In a risk assessment, a CISM calculates the annualized loss expectancy (ALE) for a specific threat. The single loss expectancy (SLE) is $50,000 and the annualized rate of occurrence (ARO) is 0.2. What is the ALE, and which risk response is most cost-effective if a control costs $12,000 per year and reduces ARO to 0.05?

Accepted Answer

Accept the risk because the control is not cost-justified.. The ALE is calculated as SLE × ARO = $50,000 × 0.2 = $10,000. After implementing the control costing $12,000 per year, the residual ALE is $50,000 × 0.05 = $2,500. The annual cost of the control ($12,000) exceeds the reduction in ALE ($10,000 - $2,500 = $7,500), so the control is not cost-justified. Therefore, accepting the risk is the most cost-effective response.

Answer

Accept the risk because ALE after control is only $2,500.

Answer

Implement the control because it reduces ALE to $2,500.

Answer

Implement the control because ALE is $10,000, and control cost is only $12,000.

Question 9

A company is evaluating its risk management process. The CISM notices that risks are being assessed based on qualitative scales (low, medium, high) but decisions require quantitative data. What is the most effective action to improve the process?

Accepted Answer

Use a hybrid approach that includes both qualitative and quantitative assessments.. A hybrid approach (Option B) is most effective because it leverages qualitative scales for initial, rapid risk identification and prioritization, while quantitative data (e.g., ALE, SLE, ARO) provides the monetary rigor needed for cost-benefit analysis and management decisions. This aligns with ISACA's guidance that risk assessment should be tailored to the decision context, not purely one method.

Answer

Switch to a fully quantitative risk assessment methodology.

Answer

Replace qualitative scales with precise monetary values.

Answer

Continue using qualitative method since it is simpler.

Question 10

Which TWO of the following are key components of an information risk management program, as defined by ISACA? (Select exactly two.)

Accepted Answer

Risk appetite and tolerance. Options B and D are correct. Risk appetite and tolerance (B) define the organization's willingness to accept risk, and a risk assessment methodology (D) provides the structured approach to identify, analyze, and evaluate risks. Business continuity planning (A) is a separate domain focused on incident recovery, not a core component of risk management. Data classification (C) is part of information security governance, not risk management program components. Vulnerability scanning (E) is a technical control activity, not a program-level component.

Answer

Business continuity plan

Answer

Data classification scheme

Answer

Vulnerability scanning process

Question 11

Which THREE of the following are valid risk treatment options according to ISO 31000? (Select exactly three.)

Accepted Answer

Risk transfer (sharing). ISO 31000 defines risk transfer (sharing) as a valid risk treatment option, where the risk is shifted to another party, such as through insurance or outsourcing. This is a standard approach in information security risk management to reduce the financial impact of a risk event.

Answer

Risk elimination

Answer

Risk deferral

Question 12

Refer to the exhibit. A security analyst reviews the firewall configuration and identifies a potential risk. What is the most likely risk?

Accepted Answer

Risk of data exfiltration via DNS tunneling.. The exhibit shows a firewall rule that permits DNS traffic (UDP/TCP port 53) from the internal network to any external destination. This configuration allows internal hosts to perform DNS queries to external servers, which can be exploited for DNS tunneling—a technique where data is encapsulated within DNS queries and responses to bypass security controls and exfiltrate sensitive information. Since DNS traffic is typically allowed through firewalls, this creates a covert channel for data exfiltration, making option D the most likely risk.

Answer

Risk of unauthorized external access to internal services.

Answer

Risk of denial-of-service attacks from internal hosts.

Answer

Risk of IP spoofing attacks from the inside network.

Question 13

Refer to the exhibit. A system administrator reviews the log and notices repeated failed SSH attempts from the same IP address. What is the most appropriate risk response?

Accepted Answer

Implement account lockout after 3 failed attempts.. Implementing an account lockout policy after 3 failed attempts directly mitigates brute-force SSH attacks by preventing further authentication attempts from the same IP address. This is a standard risk response (risk reduction) that limits the attacker's ability to guess credentials without requiring changes to the SSH protocol or disabling remote access entirely.

Answer

Change the password policy to require 12-character passwords.

Answer

Increase logging verbosity to capture more details.

Answer

Disable SSH access and use console only.

Question 14

You are the CISM for a mid-sized e-commerce company that processes credit card transactions. The company recently experienced a security incident where an attacker exploited a vulnerability in the web application to gain access to the customer database containing payment card information. The incident response team contained the breach, but the root cause analysis revealed that the vulnerability had been identified in a penetration test six months ago but was not remediated due to competing priorities. The company's risk management framework defines risk appetite as 'moderate' for information security risks. The board is concerned and has asked you to recommend improvements to prevent recurrence. The company has a limited budget and cannot implement all possible controls. Current environment: web application developed in-house, hosted on-premises, with a mix of virtual and physical servers. The security team consists of three people responsible for monitoring, incident response, and vulnerability management. The development team follows an agile methodology with bi-weekly sprints. The company has cyber liability insurance that covers breach response costs up to $2 million. Based on this scenario, what is the most effective course of action?

Accepted Answer

Implement a formal vulnerability management program with defined remediation SLAs based on risk severity.. A formal vulnerability management program with defined remediation SLAs directly addresses the root cause: the known vulnerability was not patched due to competing priorities. By tying remediation timelines to risk severity (e.g., critical vulnerabilities patched within 7 days, high within 30 days), the company operationalizes its 'moderate' risk appetite and ensures that penetration test findings are acted upon before they can be exploited. This is the most cost-effective approach given the limited budget, as it leverages existing staff and processes rather than requiring new hires or expensive rewrites.

Answer

Hire two additional security analysts to improve monitoring and incident response.

Answer

Increase cyber liability insurance coverage to $5 million to cover potential breach costs.

Answer

Rewrite the web application using a secure development framework to eliminate vulnerabilities.

Question 15

An organization has implemented a new web application that processes sensitive customer data. The risk assessment identified a high likelihood of SQL injection attacks due to insufficient input validation. Which of the following is the BEST risk treatment strategy?

Accepted Answer

Remediate the risk by implementing parameterized queries and input validation. Parameterized queries (prepared statements) and input validation directly address the root cause of SQL injection by separating SQL logic from user-supplied data. This is a remediation (mitigation) strategy that reduces the likelihood of exploitation to an acceptable level, which aligns with the high-risk scenario described.

Answer

Transfer the risk by purchasing cyber insurance

Answer

Avoid the risk by discontinuing the web application

Answer

Accept the risk because the likelihood is low after compensating controls

Question 16

An organization is conducting a risk assessment for a new cloud-based HR system. Which THREE of the following are key considerations when evaluating the inherent risk?

Accepted Answer

Likelihood of threat actors targeting the system. Inherent risk is the risk level before any security controls are applied. When evaluating inherent risk for a new cloud-based HR system, the likelihood of threat actors targeting the system (B) is a key factor because it directly influences the probability of a risk event occurring, independent of any existing or planned controls. This assessment considers the system's exposure, attractiveness to attackers, and the threat landscape specific to cloud HR platforms.

Answer

Organization's risk appetite

Answer

Effectiveness of existing security controls

Question 17

Based on the exhibit, what is the MOST appropriate next step for the information security manager?

Accepted Answer

Recommend implementing multifactor authentication to reduce the risk. Multifactor authentication (MFA) directly mitigates the most likely attack vector for the identified risk—credential theft or brute-force attacks—by requiring a second factor (e.g., a one-time password from a hardware token or biometric) in addition to the password. Since the exhibit (not shown) indicates a moderate likelihood but high impact, implementing MFA reduces the likelihood to a more acceptable level without requiring a change in risk appetite or transferring the risk. This aligns with the CISM principle of applying cost-effective controls to reduce residual risk to within the organization's risk tolerance.

Answer

Accept the risk because the likelihood is only moderate

Answer

Reassess the risk with a higher risk appetite threshold

Answer

Transfer the risk by purchasing cyber insurance

Question 18

A multinational corporation is migrating its on-premises data center to a hybrid cloud environment. The organization processes highly sensitive financial data subject to strict regulatory requirements (e.g., GDPR, SOX). During the risk assessment, the information security manager discovers that the cloud service provider (CSP) stores data in multiple geographic regions, some of which do not meet the organization's data residency requirements. Additionally, the CSP's encryption key management is not fully under the organization's control, and the incident response plan does not include specific procedures for cloud-based breaches. The organization's risk appetite is low, and the board has mandated that all risks must be mitigated to an acceptable level. Which of the following is the BEST course of action?

Accepted Answer

Require the CSP to provide dedicated hardware security modules and restrict data storage to approved regions through contractual terms. It directly addresses the root causes: data residency non-compliance and lack of control over encryption keys. Requiring dedicated hardware security modules (HSMs) and restricting data storage to approved regions through contractual terms ensures that the organization retains control over key management and meets regulatory requirements. This aligns with the low risk appetite and the board's mandate to mitigate risks to an acceptable level.

Option B (accept the risk) is incorrect because it contradicts the board's mandate to mitigate all risks, and certifications alone do not guarantee compliance.
Option C (cancel migration) is too drastic and costly; the organization can achieve compliance with the CSP rather than abandoning the cloud migration.
Option D (transfer risk via insurance) does not achieve regulatory compliance; fines may still be imposed regardless of insurance coverage.

Answer

Accept the risk because the CSP has strong security certifications and the likelihood of a breach is low

Answer

Cancel the cloud migration and build a new private data center in a compliant location

Answer

Transfer the risk by purchasing cyber insurance that covers regulatory fines

Question 19

Which of the following is the PRIMARY reason for an information security manager to integrate risk management into the organization's enterprise risk management (ERM) framework?

Accepted Answer

To support informed decision-making by aligning security risks with business objectives. Integrating information security risk into ERM ensures that security risks are considered alongside business risks, enabling better prioritization and resource allocation. This alignment helps the organization make informed decisions that balance risk appetite and business objectives. The primary driver is to support strategic decision-making, not just compliance or reporting.

Answer

To ensure compliance with regulatory requirements

Answer

To provide a consistent risk reporting structure across the enterprise

Answer

To reduce the cost of risk management through shared resources

Question 20

During a risk assessment, an organization identifies a critical vulnerability in a legacy system that cannot be patched. The system's availability is crucial for business operations. Which of the following risk treatment strategies is MOST appropriate?

Accepted Answer

Risk acceptance with formal sign-off by senior management. When a critical vulnerability cannot be patched and the system must remain available for business operations, risk acceptance is the most appropriate strategy because it formally acknowledges the residual risk after all feasible controls have been considered. Senior management sign-off is required because the risk exceeds the organization's risk appetite, and acceptance documents the decision to operate with the known vulnerability. This approach aligns with the CISM principle that risk acceptance is a valid treatment when the cost of other treatments exceeds the benefit or when no other treatment is feasible.

Answer

Risk mitigation by implementing compensating controls

Answer

Risk transfer through cyber insurance

Answer

Risk avoidance by decommissioning the system