CISM Information Security Risk Management Practice Question
An organization is determining the risk treatment for a critical business process that has a high inherent risk. Which of the following is the MOST effective risk treatment strategy when the cost to mitigate exceeds the potential loss?
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
✓
Risk acceptance
Risk acceptance is the most effective strategy when the cost to mitigate exceeds the potential loss, as it is more cost-effective to accept the risk rather than spend more on controls than the expected loss. Risk avoidance (A) is incorrect because it would mean discontinuing the critical business process, which may not be feasible or desirable. Risk reduction (B) is incorrect because it involves implementing controls that are not cost-effective in this scenario. Risk transfer (D) is incorrect because transferring risk (e.g., via insurance) may still involve premiums that exceed the potential loss or are otherwise not cost-justified.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Risk avoidance
Why it's wrong here
Avoiding the risk entirely may not be practical for a critical business process.
- ✗
Risk reduction
Why it's wrong here
Reducing risk would require controls that are not cost-justified.
- ✓
Risk acceptance
Why this is correct
Accepting the risk is justified when mitigation costs outweigh potential loss.
- ✗
Risk transfer
Why it's wrong here
Transferring risk via insurance may still have premiums that are not cost-effective.
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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.