This CISM practice question tests your understanding of information security risk management. Compare every option against the stated constraints before choosing — the best answer satisfies all requirements, not just the most obvious one. 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.
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?
Risk mitigation
Why wrong: Mitigation cost exceeds potential loss, making it inefficient.
Risk transfer
Why wrong: Transfer (e.g., insurance) may still be expensive; acceptance is more direct when cost of transfer also high.
Risk avoidance
Why wrong: Avoidance would mean discontinuing the activity, which may not be feasible or cost-effective.
Answer choices
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 mitigation cost exceeds potential loss, risk acceptance is appropriate if the risk is within the organization's risk appetite. Alternatively, risk transfer (e.g., insurance) could be considered, but acceptance is often the primary choice when the cost-benefit is negative.
Key principle: NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Answer analysis
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 cost exceeds potential loss, making it inefficient.
Risk transfer
Why it's wrong here
Transfer (e.g., insurance) may still be expensive; acceptance is more direct when cost of transfer also high.
Risk avoidance
Why it's wrong here
Avoidance would mean discontinuing the activity, which may not be feasible or cost-effective.
Option-by-option analysis
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.
Why this is wrong here
Mitigation cost exceeds potential loss, making it inefficient.
Why this is wrong here
Transfer (e.g., insurance) may still be expensive; acceptance is more direct when cost of transfer also high.
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?”
Common exam traps
NAT is not only about the public address. The inside/outside interface roles and the ACL or rule that matches traffic are just as important.
Detailed technical explanation
NAT questions usually test address translation, overload/PAT behaviour, static mappings and whether the right traffic is being translated. Read the interface direction and address terms carefully.
Key takeaway
NAT direction and interface roles matter as much as the IP address mapping. Inside/outside designation controls which traffic is translated.
Real-world example
A small business has 20 workstations on the 192.168.1.0/24 network and one public IP from its ISP. The router uses PAT (NAT overload) so all 20 devices share one public address using different source ports. NAT questions test whether you understand the four address terms and which direction each translation applies.
What to study next
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CISM NAT questions on configuration and troubleshooting.
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FAQ
Information Security Risk Management — This question tests Information Security Risk Management — Static NAT maps one inside address to one outside address..
The correct answer is: Risk acceptance — When mitigation cost exceeds potential loss, risk acceptance is appropriate if the risk is within the organization's risk appetite. Alternatively, risk transfer (e.g., insurance) could be considered, but acceptance is often the primary choice when the cost-benefit is negative.
Review the four NAT address types (inside local, inside global, outside local, outside global), PAT port overload, and static vs dynamic NAT use cases. Then practise related CISM NAT questions on configuration and troubleshooting.
Static NAT maps one inside address to one outside address.
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Last reviewed: Jun 7, 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.
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