What are the key factors involved in risk determination?

The correct answer highlights the importance of two essential factors in risk determination: likelihood and impact.

Likelihood refers to the probability that a risk will occur, allowing organizations to assess how probable a particular threat is based on past data, current trends, and potential vulnerabilities. Impact, on the other hand, indicates the potential severity of the consequences should the risk materialize. This could relate to financial loss, operational disruptions, reputational damage, or compliance penalties, depending on the nature of the risk.

By evaluating both likelihood and impact, organizations can effectively gauge the overall risk level, prioritize risks for management attention, and make informed decisions about resource allocation and response strategies. This dual assessment is critical in risk management frameworks, helping to ensure that the most significant risks are identified, understood, and mitigated.

Other options may consider relevant elements of risk management but do not encompass the primary factors of risk determination as comprehensively as likelihood and impact do. For instance, focusing solely on cost and likelihood overlooks the potential ramifications of risks. Similarly, prioritization and control are outcomes of the risk assessment process rather than foundational components, while severity and control measures concern risk mitigation more than initial risk identification.