Comprehensive and Detailed Explanation:
* Understanding Residual Risk:
* Residual risk is the amount of risk remaining after controls and mitigations have been applied.
* Risk appetite defines the level of risk an organization is willing to accept before taking additional actions.
* Why Option D is Correct:
* The CIO must clarify the organization's "Risk Appetite" to determine how much residual risk is acceptable.
* If risk exceeds the appetite, additional security measures need to be implemented.
* This aligns with ISO 31000 and NIST Risk Management Framework (RMF).
* Why Other Options Are Incorrect:
* A (Mitigation): Mitigation refers to reducing risk, but it doesn't define the acceptable level of residual risk.
* B (Impact): Impact assessment measures potential damage, but it does not determine what is acceptable.
* C (Likelihood): Likelihood is the probability of risk occurring, but not what level is acceptable
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