How does quantitative risk assessment differ from qualitative assessment?

Quantitative risk assessment is characterized by its reliance on numerical data to evaluate risks. This method assigns specific numerical values to both the likelihood of a risk occurring and the potential impact of that risk. By using statistical methods and mathematical models, quantitative assessments provide a structured and objective framework for decision-making.

This approach enables practitioners to generate clear metrics, such as expected monetary value or risk exposure levels, which can be essential for comparing risks and making informed choices. By utilizing precise numbers, organizations can better allocate resources, prioritize risks, and implement mitigation strategies based on empirical evidence.

The other options reflect aspects of qualitative assessments, highlighting the differences in methodology. Qualitative assessments tend to rely more on descriptive judgments and experienced-based evaluations rather than numerical data. Therefore, the focus on numerical values for likelihood and impact is what distinctly differentiates quantitative risk assessment from qualitative approaches.