Question 160
A facilitator averages ordinal risk labels as though they were exact monetary values. Which management response BEST addresses the stated risk or governance priority?
Explanation
Correct Answer
Ordinal labels do not inherently provide meaningful arithmetic distances. This directly meets the requirement to avoid false precision in qualitative analysis.
Incorrect Answers
Residual assessment reflects the protections already in operation. That action would distinguish inherent from residual risk; it does not address the case's priority to avoid false precision in qualitative analysis.
Risk appetite may prohibit scenarios despite low estimated frequency. It is primarily relevant when the need is to account for low-frequency catastrophic exposure, rather than to avoid false precision in qualitative analysis.
Common scales improve consistency and support decision-making. This would help standardize qualitative risk ratings; the scenario instead requires a decision to avoid false precision in qualitative analysis.






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