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200-201 Security Policies and Procedures Practice Question

During a risk assessment, a company identifies that the annualized loss expectancy (ALE) for a specific threat is $50,000. The cost to implement a mitigation control is $30,000 with an annual maintenance cost of $5,000. According to risk management principles, what is the most appropriate risk treatment option?

Answer choices

Why each option matters

Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.

Correct answer & explanation

✓

Mitigate the risk by implementing the control

If the cost of mitigation ($30,000 + $5,000 = $35,000) is less than the ALE ($50,000), it is cost-effective to mitigate the risk.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    Accept the risk because the mitigation cost is higher than the ALE

    Why it's wrong here

    Acceptance is unjustified because the $35,000 annual mitigation cost is below the $50,000 ALE, so the control yields a positive return. It is tempting because acceptance suits risks where treatment exceeds expected loss, but here the arithmetic favours mitigation, making acceptance the wrong treatment.

  • ✗

    Avoid the risk by discontinuing the activity

    Why it's wrong here

    Discontinuing the activity eliminates the risk but forfeits the business process generating value, an excessive response when a $35,000 control offsets a $50,000 ALE. It is tempting because avoidance suits risks with no viable control, but mitigation is proportionate here.

  • ✗

    Transfer the risk by purchasing cyber insurance

    Why it's wrong here

    Insurance transfers financial impact but leaves the $50,000 ALE exposure and the threat itself unaddressed, and premiums add recurring cost. It is tempting because transfer suits low-frequency, high-severity risks that are impractical to mitigate, yet here mitigation costs $35,000 annually against a $50,000 ALE, so reduction is justified.

  • ✓

    Mitigate the risk by implementing the control

    Why this is correct

    The control's total annual cost is $35,000, which is lower than the $50,000 ALE, so mitigation yields a positive return and reduces expected loss. This satisfies the risk management principle of selecting treatment where control cost is less than the annualised loss expectancy.

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JA

Written by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

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