CISM High risk with costly mitigation Practice Question
An information security manager has identified a risk with a high likelihood and high impact. The cost of mitigating the risk exceeds the potential loss. What is the MOST appropriate risk treatment strategy?
⚠ Common exam trap
CISM often tests the confusion between risk acceptance and risk mitigation, leading candidates to choose mitigation because the risk is high, without considering the cost-benefit analysis that makes acceptance the most appropriate strategy.
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
When the cost of mitigating a risk exceeds the potential loss, the most appropriate strategy is risk acceptance. This means the organization acknowledges the risk and decides to bear the potential loss, as the cost of mitigation is not justified. Risk acceptance is a valid treatment when the risk is within the organization's risk appetite.
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 mitigation
Why it's wrong here
Mitigation spends more than the expected loss, so it destroys value here. The stem's cost-versus-loss comparison points to accepting the risk and monitoring it. Mitigation suits risks whose reduction justifies the control spend, particularly where likelihood or impact can be materially lowered.
- ✓
Risk acceptance
Why this is correct
Risk acceptance is appropriate because the mitigation cost exceeds the potential loss, making transfer or avoidance economically unjustifiable. The manager formally acknowledges the residual risk, documents it, and retains it within the organisation's defined risk appetite, satisfying the cost-benefit constraint stated in the stem.
- ✗
Risk transfer
Why it's wrong here
Transfer shifts financial consequence via insurance or contracts, yet a high-likelihood, high-impact risk may be uninsurable or priced above the potential loss. The stem's cost comparison indicates acceptance instead. Transfer suits low-frequency, high-severity risks where a third party can absorb the impact.
- ✗
Risk avoidance
Why it's wrong here
Avoidance eliminates the activity generating the risk, which is disproportionate when the loss is merely cheaper than mitigating it. The stem's cost-versus-loss comparison indicates acceptance. Avoidance suits risks whose impact is intolerable and cannot be reduced or transferred economically.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The CISM exam frequently reuses these exact scenarios with slightly different constraints.
✓Risk acceptanceCorrect answer▾
Why this is correct
Risk acceptance is appropriate because the mitigation cost exceeds the potential loss, making transfer or avoidance economically unjustifiable. The manager formally acknowledges the residual risk, documents it, and retains it within the organisation's defined risk appetite, satisfying the cost-benefit constraint stated in the stem.
✗Risk mitigationWrong answer — click to see why▾
Why this is wrong here
Mitigation cost exceeds potential loss, making it inefficient.
✗Risk transferWrong answer — click to see why▾
Why this is wrong here
Transfer (e.g., insurance) may still be expensive; acceptance is more direct when cost of transfer also high.
✗Risk avoidanceWrong answer — click to see why▾
Why this is wrong here
Avoidance would mean discontinuing the activity, which may not be feasible or cost-effective.
Analysis generated from the official CISMblueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
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About these practice questions
One of 924 original CISM practice questions on Courseiva, each with a full explanation and wrong-answer analysis — not exam dumps or protected exam content. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
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.