Comprehensive and Detailed Explanation:
* Understanding Residual Risk:
* Residual riskis the amount of risk remainingafter controls and mitigations have been applied.
* Risk appetitedefines the level of risk an organization iswilling to acceptbefore taking additional actions.
* Why Option D is Correct:
* TheCIO must clarify the organization's "Risk Appetite"to determinehow much residual risk is acceptable.
* If risk exceeds the appetite,additional security measuresneed to be implemented.
* This aligns withISO 31000andNIST Risk Management Framework (RMF).
* Why Other Options Are Incorrect:
* A (Mitigation):Mitigation refers toreducing risk, but it doesn't define the acceptable level of residual risk.
* B (Impact):Impact assessment measurespotential damage, but it does not determine what is acceptable.
* C (Likelihood):Likelihood is theprobability of risk occurring, but not what level isacceptable.