According to the International Professional Practices Framework, risk is:
I. Defined as the negative effect of events that are expected to occur.
II. Measured in terms of consequences.
III. Measured in terms of likelihood.
According to the International Professional Practices Framework, risk is:
I. Defined as the negative effect of events that are expected to occur.
II. Measured in terms of consequences.
III. Measured in terms of likelihood.
Risk is typically measured in terms of both consequences and likelihood, which are covered by points II and III. The definition of risk is not limited to negative effects but to the variance from expected results, which can be positive or negative, thus making point I incorrect. Therefore, the best answer is moments related to II and III.
according to the IIA Guidance Risk is measured in term of impact and likelihood its not necessary to represent a negative impact, and then the choice 1 + 2 is correct but in logical if the risk is not represent the negative impact only, how we can distinguish between risk and opportunity, when the opportunity represent positive impact ??
There is a cost/opportunity relationship. There is no business without risk appetite (there is no such thing as zero risk), because the outcome can be positive.