Which statement about risk assessment methods is correct?

• A. Qualitative methods rely on extensive numerical data
• B. Quantitative methods rely on subjective judgments
• C. Quantitative methods use numerical probabilities and financial values
• D. Qualitative methods produce precise monetary values

Answer: (C)

Risk assessment methods can be qualitative or quantitative. Quantitative approaches convert risks into numbers—probabilities of events and their financial impact—so you can calculate metrics like expected monetary loss and compare different options. That’s why the statement about using numerical probabilities and financial values is correct.

Qualitative methods describe risks with descriptive terms or qualitative scales (for example, low/medium/high) and rely mainly on expert judgment rather than extensive numerical data. They don’t yield precise monetary values, which is why that other description doesn’t fit. Quantitative methods, while they can incorporate judgments, are defined by their numerical data and models rather than subjective judgments as the primary input.