Ace the 2025 Certified Governance Risk & Compliance (CGRC) Challenge – Navigate the Governance Maze with Confidence!

Total risk is a concept that combines various components to assess the likelihood and potential impact of negative events on an organization's assets. The correct relationship expressing total risk is often formulated as the product of three critical elements: threats, vulnerabilities, and asset value.

Threats refer to potential events or actions that can cause harm to an asset. Vulnerabilities are weaknesses or gaps in a system that can be exploited by threats, leading to potential damage or loss. Asset value represents the importance or worth of the asset in question, which could be financial, operational, or reputational.

The relationship Total Risk = Threats x Vulnerability x Asset Value captures the essence of risk assessment by integrating each of these components. A higher number of threats or greater vulnerabilities increases the total risk, while a higher asset value emphasizes the potential impact of exploiting those vulnerabilities.

Options that replace "threats" with more specific terms like "viruses" or "exploit" limit the framework solely to certain types of threats or exploits. While viruses can be a form of threat and exploits can represent a way vulnerabilities are taken advantage of, they do not encompass the full scope of all potential threats or actions that could lead to risk. This leads to an incomplete view of total risk in an organization