What distinguishes qualitative risk assessment from quantitative risk assessment?

The distinction between qualitative and quantitative risk assessment fundamentally revolves around the nature of data utilized in each approach. In qualitative risk assessment, the focus is on gathering non-numerical information that can capture the subjective perceptions and opinions about risks. This method often involves descriptive categories, such as ratings or rankings based on the severity and likelihood of risks, which helps prioritize risks without expressing them in numerical terms.

In contrast, quantitative risk assessment employs numerical data and statistical methods to evaluate risks. This approach typically involves measuring risks in terms of probabilities and potential financial impacts, allowing for a more precise analysis of risk exposure. By using numerical data, quantitative assessments can provide detailed insights such as the expected monetary value of risks and can generate more definitive metrics for decision-making.

Options that suggest qualitative assessment focuses on monetary value are not accurate, as this is a characteristic of quantitative assessment. Likewise, the notion that qualitative assessments are more precise is misleading because qualitative methods inherently involve subjective judgments. Similarly, claiming that quantitative assessments are based solely on subjective opinions does not hold, as they rely heavily on objective, measurable data. Therefore, the correct response highlights the fundamental difference that qualitative assessments lack the numerical data that characterize quantitative assessments.