Price the Risk, Pick the Response

About this interactive

From the lesson: **Risk = probability × impact.** Probability is a percent, impact a dollar amount. A 10% chance of a hack that would cost $100,000 is a risk of $10,000. Putting a number on each risk lets you compare them and fix the biggest first. **The four responses:** - **Avoid:** do not do the risky thing at all, such as not launching the system. - **Reduce:** add controls that lower the probability or the impact, such as an extra firewall. Many frameworks call this mitigate. - **Transfer:** hand the risk to someone else, such as an insurer or an outside provider. - **Accept:** the probability or impact is low, or the reward high, so the business lives with it, knowingly.

What you'll learn

Calculate a risk in dollars as probability times impact, and use it to compare risks and judge whether a control is worth its cost
Name the response a business chooses for a risk: avoid it, reduce it, transfer it or accept it

Aligned to

Cisco CCST Cybersecurity

1.1 Define essential security principles.

4.3 Explain risk management

Cisco CCNA

5.2 Describe security program elements

Key terms

Risk: The potential for loss or harm resulting from a threat exploiting a vulnerability.
Quantitative Risk Calculation: A method of measuring risk by multiplying the probability of a threat occurring by its financial impact to produce a numeric risk value.
Risk Avoidance: A risk response strategy that eliminates exposure to a risk by choosing not to engage in the activity that creates it.
Risk Reduction: A risk response strategy that takes steps to decrease the probability or impact of a risk.
Risk Transference: A risk response strategy that shifts the financial or operational burden of a risk to a third party, such as through insurance.
Risk Acceptance: A risk response strategy that acknowledges a risk and proceeds without additional mitigation because the benefits outweigh the potential harm.
Risk Management: The ongoing process of identifying, assessing, and mitigating risks to an acceptable level.

Topics

Risk Management Risk Calculation Risk Response Security Program Interactive Calculation

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