The answer is when the cost to mitigate is higher than the potential financial loss from a breach. This condition best supports risk acceptance because it aligns directly with the risk acceptance criteria cost-benefit analysis, where the expense of controls outweighs the expected loss, making acceptance the economically rational choice. On the CISM exam, this tests your understanding of risk treatment decisions within the broader risk management framework, often appearing as a scenario where a risk owner must justify acceptance over avoidance or mitigation. A common trap is confusing high vulnerability or lack of controls with a reason to accept—these actually increase risk and demand treatment, not acceptance. Remember the memory tip: “Cost beats loss, accept the cost.”
CISM Information Security Risk Management Practice Question
This CISM practice question tests your understanding of information security risk management. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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 is developing a risk treatment plan for a set of identified risks. One risk involves a third-party vendor that hosts critical data. The risk owner recommends accepting the risk. Which of the following conditions would BEST support this decision?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "best"
Why it matters: Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
The cost to mitigate is higher than the potential financial loss from a breach
Option A is correct because accepting risk is justified when the cost of mitigation exceeds the potential loss. Option B is wrong because high vulnerability increases risk, making acceptance less appropriate. Option C is wrong because lack of controls increases inherent risk. Option D is wrong because business impact is a factor, but if mitigation cost is higher, acceptance may be appropriate.
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.
✗
The organization has no compensating controls in place
Why it's wrong here
Lack of controls increases risk, so acceptance without any controls is not prudent.
✓
The cost to mitigate is higher than the potential financial loss from a breach
Why this is correct
If mitigation costs outweigh the expected loss, acceptance is a sound business decision.
Clue confirmation
The clue word "best" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
The risk is within the organization's risk appetite but the business impact is high
Why it's wrong here
If impact is high, even moderate likelihood may exceed appetite; acceptance should only occur if residual risk is low.
✗
The vendor has a history of security incidents
Why it's wrong here
A history of incidents suggests higher likelihood, making acceptance inadvisable.
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: The cost to mitigate is higher than the potential financial loss from a breach — Option A is correct because accepting risk is justified when the cost of mitigation exceeds the potential loss. Option B is wrong because high vulnerability increases risk, making acceptance less appropriate. Option C is wrong because lack of controls increases inherent risk. Option D is wrong because business impact is a factor, but if mitigation cost is higher, acceptance may be appropriate.
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.
Are there clue words in this question I should notice?
Yes — watch for: "best". Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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This CISM practice question is part of Courseiva's free ISACA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CISM exam.
Question Discussion
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