- A
Increased insurance premium
Why wrong: Often indirect or subsequent.
- B
Reputation loss
Why wrong: Indirect cost.
- C
Incident response team expenses
Direct cost.
- D
Lost business opportunities
Why wrong: Indirect cost.
- E
Customer notification costs
Direct cost.
Question 309 of 1,000
CRISC IT Risk Assessment Practice Question
This CRISC practice question tests your understanding of it risk assessment. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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.
Which TWO of the following are considered direct costs in the financial impact assessment of a risk event?
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
✓
Incident response team expenses
Incident response team expenses (C) are direct costs because they are immediate, quantifiable outlays incurred specifically to respond to and mitigate a risk event. Similarly, customer notification costs (E) are direct costs as they represent mandatory, traceable expenditures for informing affected parties, often required by regulations like GDPR or HIPAA. These costs are directly attributable to the incident and can be precisely measured.
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.
- ✗
Increased insurance premium
Why it's wrong here
Often indirect or subsequent.
- ✗
Reputation loss
Why it's wrong here
Indirect cost.
- ✓
Incident response team expenses
Why this is correct
Direct cost.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Lost business opportunities
Why it's wrong here
Indirect cost.
- ✓
Customer notification costs
Why this is correct
Direct cost.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse indirect costs (like reputation loss or increased premiums) with direct costs, failing to recognize that direct costs must be immediate, quantifiable, and directly attributable to the incident response activities.
Detailed technical explanation
How to think about this question
In financial impact assessments, direct costs are those that can be directly traced to the risk event, such as forensic investigation fees, legal consultation, and system restoration costs. Indirect costs, like increased insurance premiums, stem from the event's effect on the organization's risk profile and are calculated using actuarial models. Real-world scenarios, such as a data breach under GDPR, often mandate specific direct costs like customer notification (Article 34) and incident response team deployment, which are tracked via cost accounting codes.
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: Incident response team expenses — Incident response team expenses (C) are direct costs because they are immediate, quantifiable outlays incurred specifically to respond to and mitigate a risk event. Similarly, customer notification costs (E) are direct costs as they represent mandatory, traceable expenditures for informing affected parties, often required by regulations like GDPR or HIPAA. These costs are directly attributable to the incident and can be precisely measured.
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.
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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