Question

Which of the following statements concerning qualitative and quantitative approaches to assessing risk-tolerance is (are) correct?
I. The quantitative devices for assessing risk-tolerance are best that contain "norms."
II. Other things being equal, the fewer the number of questions in a quantitative device for assessing risk-tolerance, the more accurate will be the results.
(A) I only
(B) II only
(C) Both I and II
(D) Neither I nor II

Answer 1

Answer: A (I only)

Explanation:

Risk tolerance may be discussed as the capacity of the level of risk an organization is willing to accept, in terms of qualitative or quantitative values which could be used as a standard to make risk-based decisions.

The quantitative devices for assessing risks tolerance uses significant and objective data to determine asset value, probability of loss, and those risks that are associated with it.