Question

If \( P \) is risk probability, \( L \) is loss, then Risk Exposure (RE) is computed as:

• A. \( RE = \frac{P}{L} \)
• B. \( RE = P + L \)
• C. \( RE = P \times L \)
• D. \( RE = 2 \times P \times L \)

Hint:

Risk Exposure (RE) is a fundamental risk assessment metric and is calculated as: \[ RE = P \times L \] where \( P \) is the probability of occurrence and \( L \) is the loss incurred.

Answer 1

The Correct Option is C

Step 1: Understanding Risk Exposure (RE) Risk Exposure quantifies the expected loss due to a risk event and is calculated as: \[ RE = \text{Probability of Risk} \times \text{Loss} = P \times L \] where:
- \( P \) represents the probability of the risk occurring.
- \( L \) represents the potential loss if the risk occurs.
Step 2: Explanation of Options
- Option (A) \( \frac{P}{L} \) is incorrect since division does not represent risk impact.
- Option (B) \( P + L \) is incorrect because summing probability and loss does not measure risk exposure.
- Option (C) \( P \times L \) is correct as per the standard risk exposure formula.
- Option (D) \( 2 \times P \times L \) is incorrect as there is no standard factor of 2 in RE computation.