Which of the following should be the PRIMARY input to determine risk tolerance?
A.
Regulatory requirements
B.
Organizational objectives
C.
Annual loss expectancy (ALE)
D.
Risk management costs
The Answer Is:
B
This question includes an explanation.
Explanation:
Organizational objectives should be the primary input to determine risk tolerance, as they define the desired outcomes and performance of the organization, and guide the selection of the acceptable level of risk that the organization is willing to take to achieve those objectives. Regulatory requirements, annual loss expectancy (ALE), and risk management costs are not the primary inputs, as they are more related to the external or internal constraints or factors that affect the risk tolerance, rather than the drivers or determinants of the risk tolerance. References = CRISC Review Manual, 7th Edition, page 109.
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