When residual risk is minimized:
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A. B. C. D.A.
Since residual risk is the risk that remains after putting into place an effective risk management program, it is probable that the organization will decide that it is an acceptable risk if sufficiently minimized.
Transferred risk is risk that has been assumed by a third party, therefore its magnitude is not relevant.
Accordingly, choices B and D are incorrect since transferred risk does not necessarily indicate whether risk is at an acceptable level.
Minimizing residual risk will not reduce control risk.
Residual risk is the risk that remains after an organization has implemented its risk mitigation measures. Minimizing residual risk means reducing the amount of risk that remains after implementing these measures.
A. Answer A, "acceptable risk is probable," is not correct. Acceptable risk is a level of risk that an organization has determined is tolerable and within their risk appetite, regardless of whether residual risk is minimized or not.
B. Answer B, "transferred risk is acceptable," is not correct either. Transferred risk is the risk that is transferred to another party, such as through insurance or outsourcing. The acceptability of transferred risk is based on the terms of the transfer and the receiving party's ability to manage the risk.
C. Answer C, "control risk is reduced," is the correct answer. Minimizing residual risk involves implementing additional control measures or improving existing ones to further reduce the risk. By doing so, the organization is reducing the likelihood and impact of an adverse event.
D. Answer D, "risk is transferable," is not correct. Residual risk can be transferred, but it is not necessarily transferable after it has been minimized. The decision to transfer residual risk is based on the organization's risk management strategy and the feasibility of transferring the risk.