- A
Vendor's marketing budget
Why wrong: Marketing budget is irrelevant to security risk.
- B
Criticality of the service provided by the vendor
Correct. Service criticality affects business impact.
- C
Vendor's stock price
Why wrong: Stock price is not a risk factor for third-party security.
- D
Type of data accessed by the vendor
Correct. Data sensitivity is a key factor.
- E
Vendor's annual revenue
Why wrong: Revenue is not a direct indicator of risk from the vendor's services.
Question 74 of 905
CISM Information Security Programme Practice Question
This CISM practice question tests your understanding of information security programme. 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 implementing a vendor tiering system for third-party risk management. Which TWO factors should be used to determine the tier of a vendor?
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
✓
Criticality of the service provided by the vendor
Vendor tiering is typically based on the sensitivity of data the vendor accesses and the criticality of the service they provide. These factors determine the risk level and required controls.
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.
- ✗
Vendor's marketing budget
Why it's wrong here
Marketing budget is irrelevant to security risk.
- ✓
Criticality of the service provided by the vendor
Why this is correct
Correct. Service criticality affects business impact.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Vendor's stock price
Why it's wrong here
Stock price is not a risk factor for third-party security.
- ✓
Type of data accessed by the vendor
Why this is correct
Correct. Data sensitivity is a key factor.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Vendor's annual revenue
Why it's wrong here
Revenue is not a direct indicator of risk from the vendor's services.
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 Programme — study guide chapter
Learn the concepts, then practise the questions
- →
Information Security Programme practice questions
Targeted practice on this topic area only
- →
All CISM questions
905 questions across all exam domains
- →
Certified Information Security Manager CISM study guide
Full concept coverage aligned to exam objectives
- →
CISM practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Related CISM practice-question pages
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Information Security Program practice questions
Practise CISM questions linked to Information Security Program.
Incident Management practice questions
Practise CISM questions linked to Incident Management.
Information Security Programme practice questions
Practise CISM questions linked to Information Security Programme.
Information Security Governance practice questions
Practise CISM questions linked to Information Security Governance.
Information Security Risk Management practice questions
Practise CISM questions linked to Information Security Risk Management.
CISM fundamentals practice questions
Practise CISM questions linked to CISM fundamentals.
CISM scenario practice questions
Practise CISM questions linked to CISM scenario.
CISM troubleshooting practice questions
Practise CISM questions linked to CISM troubleshooting.
Practice this exam
Start a free CISM practice session
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
FAQ
Questions learners often ask
What does this CISM question test?
Information Security Programme — This question tests Information Security Programme — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Criticality of the service provided by the vendor — Vendor tiering is typically based on the sensitivity of data the vendor accesses and the criticality of the service they provide. These factors determine the risk level and required controls.
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.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Last reviewed: Jul 4, 2026
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
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.