CISM Information Security Risk Management Practice Question
This CISM practice question tests your understanding of information security risk management. Compare every option against the stated constraints before choosing — the best answer satisfies all requirements, not just the most obvious one. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A company has a risk appetite that is 'low' for operational risks. A risk assessment recently identified that a high-speed trading platform has a residual risk rating of 'high' after controls are applied. The cost to further reduce the risk is $1 million, which exceeds the expected benefit. What is the most appropriate action for the risk owner?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Accept the residual risk with formal sign-off from senior management
Option D is correct because risk acceptance requires explicit approval from senior management when residual risk exceeds appetite. Option A is wrong because risk appetite should not be changed without board approval, and the cost-benefit indicates acceptance is more practical. Option B is wrong because implementing controls that are not cost-effective is not prudent. Option C is wrong because risk transfer may not be available or cost-effective.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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 residual risk with formal sign-off from senior management
Why this is correct
Since controls are not cost-effective, acceptance is appropriate with proper approval.
Related concept
Read the scenario before looking for a memorised answer.
✗
Adjust the risk appetite to 'moderate' to align with the residual risk
Why it's wrong here
Risk appetite is strategic; changing it solely for one risk is inappropriate.
✗
Transfer the risk by taking out an insurance policy
Why it's wrong here
Insurance might not cover high-speed trading losses adequately.
✗
Approve additional controls to lower residual risk regardless of cost
Why it's wrong here
Not cost-justified; alternative treatments should be considered.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
Use explanations to understand the rule behind the answer.
TExam Day Tips
→Underline the problem statement mentally.
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the CISM exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
Identify which CISM exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Information Security Risk Management — This question tests Information Security Risk Management — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Accept the residual risk with formal sign-off from senior management — Option D is correct because risk acceptance requires explicit approval from senior management when residual risk exceeds appetite. Option A is wrong because risk appetite should not be changed without board approval, and the cost-benefit indicates acceptance is more practical. Option B is wrong because implementing controls that are not cost-effective is not prudent. Option C is wrong because risk transfer may not be available or cost-effective.
What should I do if I get this CISM question wrong?
Identify which CISM exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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