CISM Information Security Risk Management Practice Question
A risk manager is evaluating a control that reduces the likelihood of a threat from high to low. The cost of the control is $100,000 annually. The expected loss without the control is $500,000 per year. Which of the following should the risk manager recommend?
⚠ Common exam trap
The trap here is that candidates may incorrectly assume that any control costing $100,000 is too expensive, failing to perform a proper cost-benefit comparison against the $500,000 expected loss, or they may confuse risk reduction with risk transfer or avoidance without evaluating financial justification.
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
✓
Implement the control
The control reduces the annualized loss expectancy (ALE) from $500,000 to a much lower value (since likelihood drops from high to low). The annual cost of the control is $100,000, which is significantly less than the $500,000 expected loss without it. Implementing the control provides a positive return on investment (ROI) and is the most cost-effective risk mitigation strategy.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Avoid the risk by discontinuing the process
Why it's wrong here
Avoidance may have significant opportunity costs.
- ✗
Transfer the risk through insurance
Why it's wrong here
Insurance may have premiums higher than control cost.
- ✓
Implement the control
Why this is correct
Net benefit: $400,000 loss reduction minus $100,000 cost = $300,000 savings.
- ✗
Accept the risk
Why it's wrong here
Accepting would incur $500,000 loss, which is higher than implementing control.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.