Certified in Risk and Information Systems Control (CRISC) — Question 1040

Which of the following is described by the definition given below?
"It is the expected guaranteed value of taking a risk."

Answer options

• A. Certainty equivalent value
• B. Risk premium
• C. Risk value guarantee
• D. Certain value assurance

Correct answer: A

Explanation

The correct answer is A, Certainty equivalent value, because it represents the amount an individual would accept to forgo a gamble with uncertain outcomes. The other options do not accurately define this concept; B refers to the additional return expected for taking on risk, C and D are not recognized financial terms related to risk assessment.