After conducting a risk assessment, a company identifies a potential security threat but decides that the cost of addressing the threat outweighs the potential impact. What is this decision an example of?
Question
After conducting a risk assessment, a company identifies a potential security threat but decides that the cost of addressing the threat outweighs the potential impact. What is this decision an example of?
Solution
This decision is an example of "Risk Acceptance". It is a strategy in risk management where a company acknowledges that the potential loss from a risk is not great enough to warrant spending money to avoid it. Instead, they decide to accept the risk and deal with any potential fallout as it occurs. This is often the case when the cost of preventing the risk is greater than the cost of the risk itself.
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