Bankruptcy Risks

D.

Catastrophic risk causes critical financial losses that have the possibility of bankruptcy.

Incorrect Answers: A: Marginal risk causes financial loss in a single line of business and a reduced return on IT investment.

B: It causes minimal impact on a single line of business affecting their ability to deliver services or products.

C: Critical risk causes serious financial losses in more than one line of business with a loss in productivity.

The type of risk that could result in bankruptcy is Catastrophic, option D.

Catastrophic risk is the type of risk that poses a severe threat to an organization's existence, and it has the potential to cause a significant loss that could lead to bankruptcy or complete failure of the organization. Such risks are typically associated with events that are low probability but high impact.

Examples of catastrophic risks could include natural disasters such as earthquakes, floods, hurricanes, or tornadoes, terrorist attacks, severe economic downturns, significant data breaches or cyber-attacks, or major product recalls due to safety concerns.

On the other hand, Marginal and Negligible risks are typically considered to be of low significance and pose little threat to an organization's operations. These risks are usually monitored, but the cost of mitigating them might be more than the potential impact they could have.

Critical risks, on the other hand, are risks that have a high impact, and if they occur, they could cause significant damage to the organization. However, such risks are usually of high probability, and therefore they are expected and prepared for. While critical risks could cause severe damage, they are not likely to result in bankruptcy on their own.

Therefore, among the options given, only Catastrophic risk is the type of risk that could potentially result in bankruptcy.