Risk appetite, tolerance and capacity Flashcards
1
Q
Risk
A
The likelihood that something bad will happen.
2
Q
Risk appetite
A
The amount of risk a business is willing to incur.
3
Q
Risk tolerance
A
The amount of deviation from the risk appetite a business considers acceptable.
4
Q
Risk capacity
A
The amount of risk a business can absorb without ceasing to exist.
risk appetite + risk tolerance <= risk capacity
5
Q
Risk acceptance
A
when an org decides that no action is required for a specific risk because it’s willing to suffer the consequences instead of expending resources to mitigate it.
6
Q
Control
A
Something put into effect to reduce risk.
