In the risk assessment formula, what does risk equal?

Risk is fundamentally understood as the potential for loss or harm resulting from a given action or situation, and this is quantitatively assessed through a formula. The correct approach to calculating risk involves multiplying the three key components: consequence, exposure, and probability.

When considering risk, consequence refers to the severity of the potential outcome, exposure represents how frequently or intensely an individual or asset may face a particular risk, and probability indicates the likelihood of that risk occurring. By multiplying these three elements together, the formula encapsulates not only the severity of potential negative outcomes but also how often they might happen and how likely they are to occur, resulting in a comprehensive assessment of risk.

Thus, the correct formula of consequence x exposure x probability provides a clear mathematical representation of risk, allowing for an effective evaluation and management of potential hazards in various contexts, such as workplace safety, financial investments, and project planning. This thorough analysis helps organizations to identify and prioritize risks appropriately.