and D are incorrect. These terms are not applied for the risk that is generated as a
result of risk response.

Section: Volume B
Explanation:
Exploit is a method for handling positive project risk.
Incorrect Answers:
B, C, D: These are all responses which is used for negative risks, and not the positive risk.

Section: Volume C
Explanation:
Risk cannot be removed completely from the enterprise; it can only be reduced to a level that an organization is willing to accept. Risk management programs are hence designed to accomplish the task of reducing risks.
Incorrect Answers:
B: Depending on the risk preference of an enterprise, it may or may not choose to pursue risk mitigation to the point at which benefit equals or exceeds the expense. Hence this is not the primary objective of designing the risk management program.
C: Reducing risk to a level too small to measure is not practical and is often cost-prohibitive.
D: Reducing risks to a specific return ignores the qualitative aspects of the risk which should also be considered.

The ALE of this project will be $ 108,000. Single Loss Expectancy is a term related to Quantitative Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset. It is mathematically expressed as follows: SLE = Asset value * Exposure factor Therefore, SLE = 200,000 * 0.45 = $ 90,000 As the loss is occurring once every month, therefore ARO is 12. Now ALE can be calculated as follows: ALE = SLE * ARO = 90,000 * 12 = $ 108,000