Question 114
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What is the role of the “impact” factor in a risk formula?
A. Measures how long the risk lasts
B. Indicates the likelihood of a risk occurring
C. Reflects the potential damage caused if a risk is realized
D. Tracks who discovered the risk
Answer: C. Reflects the potential damage caused if a risk is realized
Impact is a core component of risk—it quantifies potential harm in financial, operational, or reputational terms.