Likelihood and impact are key factors in evaluating uncertainty, especially in the context of risk and reward.
* Likelihood:
* Measures the probability or chance of an event occurring.
* Example: The likelihood of a data breach based on historical trends.
* Impact:
* Measures the economic and non-economic consequences of the event.
* Examples: Financial losses, reputational damage, or operational disruptions.
* Why Other Options Are Incorrect:
* A: Impact refers to consequences, not the location of the event.
* B: Impact is not limited to categories; it involves actual consequences.
* D: Likelihood considers controls but is not exclusively post-control.
References:
* ISO 31000 (Risk Management): Defines likelihood and impact as fundamental components of risk assessment.
* COSO ERM Framework: Emphasizes assessing both likelihood and impact in risk evaluation.