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CRISC Practice Question: Which TWO of the following are characteristics of…
Which TWO of the following are characteristics of an EFFECTIVE key risk indicator (KRI)?
⚠ Common exam trap
Many candidates confuse risk appetite (a high-level statement of willingness to accept risk) with risk tolerance (specific thresholds that KRIs measure), leading them to incorrectly select option C as a characteristic of an effective KRI.
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
✓
Provides an early warning signal of increasing risk exposure.
An effective KRI must provide an early warning signal of increasing risk exposure, enabling proactive risk management before losses materialize. This aligns with the CRISC domain of Risk and Control Monitoring and Reporting, where KRIs are forward-looking metrics that track changes in risk levels, such as a sudden spike in failed login attempts indicating a potential cybersecurity threat.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Provides an early warning signal of increasing risk exposure.
Why this is correct
Predictive nature is key for proactive risk management.
- ✓
Is actionable, meaning it can trigger predefined responses when thresholds are breached.
Why this is correct
Actionability ensures the KRI leads to remediation.
- ✗
Is derived from the organization's risk appetite statement.
Why it's wrong here
KRIs should inform risk appetite, not be derived from it.
- ✗
Uses smoothed data to avoid alert fatigue.
Why it's wrong here
Smoothing can delay detection of risk changes.
- ✗
Measures historical loss events.
Why it's wrong here
Historical loss is lagging, not predictive.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.