- A
Residual risk = Inherent risk + Control effectiveness
Why wrong: Adding control effectiveness does not reduce risk.
- B
Residual risk = Inherent risk - Control effectiveness
Why wrong: Subtraction is not the proper method; effectiveness is a percentage factor.
- C
Residual risk = Inherent risk × (1 - Control effectiveness)
This formula correctly represents that controls reduce inherent risk by their effectiveness.
- D
Residual risk = Inherent risk / Control effectiveness
Why wrong: Division does not appropriately model the reduction.
Question 263 of 1,000
CRISC IT Risk Assessment Practice Question
This CRISC practice question tests your understanding of it risk assessment. 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.
After implementing a set of controls for a critical risk, the residual risk is calculated. The risk owner argues that the residual risk remains high and requires further treatment. Which of the following BEST describes the relationship between inherent risk, control effectiveness, and residual risk?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"best"Why it matters: Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
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
✓
Residual risk = Inherent risk × (1 - Control effectiveness)
Option C is correct because residual risk is calculated by applying control effectiveness as a percentage reduction to inherent risk. This is the standard formula used in risk management frameworks: Residual Risk = Inherent Risk × (1 - Control Effectiveness). If control effectiveness is 0.8 (80%), then only 20% of the inherent risk remains, reflecting the portion not mitigated by 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.
- ✗
Residual risk = Inherent risk + Control effectiveness
Why it's wrong here
Adding control effectiveness does not reduce risk.
- ✗
Residual risk = Inherent risk - Control effectiveness
Why it's wrong here
Subtraction is not the proper method; effectiveness is a percentage factor.
- ✓
Residual risk = Inherent risk × (1 - Control effectiveness)
Why this is correct
This formula correctly represents that controls reduce inherent risk by their effectiveness.
Clue confirmation
The clue word "best" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Residual risk = Inherent risk / Control effectiveness
Why it's wrong here
Division does not appropriately model the reduction.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the misconception that residual risk is a simple subtraction (inherent risk minus control effectiveness), but the correct relationship is multiplicative because controls reduce risk proportionally, not by a fixed amount.
Detailed technical explanation
How to think about this question
In practice, control effectiveness is often expressed as a decimal between 0 and 1, representing the proportion of risk mitigated. For example, if inherent risk is scored as 100 and control effectiveness is 0.7, residual risk = 100 × (1 - 0.7) = 30. This formula aligns with ISO 31000 and COSO ERM frameworks, where controls reduce the likelihood or impact of a risk event, and the residual risk is the remaining exposure after accounting for control strength.
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.
TExam Day Tips
- 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 CRISC 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 exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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FAQ
Questions learners often ask
What does this CRISC question test?
IT Risk Assessment — This question tests IT Risk Assessment — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Residual risk = Inherent risk × (1 - Control effectiveness) — Option C is correct because residual risk is calculated by applying control effectiveness as a percentage reduction to inherent risk. This is the standard formula used in risk management frameworks: Residual Risk = Inherent Risk × (1 - Control Effectiveness). If control effectiveness is 0.8 (80%), then only 20% of the inherent risk remains, reflecting the portion not mitigated by controls.
What should I do if I get this CRISC question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "best". Signals that multiple options may be partially correct. Choose the option that most directly solves the exact problem described, not the one that sounds most complete.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jul 4, 2026
This CRISC 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 CRISC exam.
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