The objective of risk analysis is to help IT management strike an economic balance between the impact of risks and the cost of protective measures.

The statement accurately defines a primary objective of risk analysis within the broader context of risk management. The core purpose is to provide management with the necessary data to make informed, cost-effective decisions about security. It involves identifying potential threats and vulnerabilities, assessing their potential impact (e.g., financial loss, reputational damage), and estimating their likelihood. This analysis enables a cost-benefit comparison between the expense of implementing a security control (protective measure) and the value of the risk reduction it provides. The goal is not to eliminate all risks, which is often impossible or financially impractical, but to reduce them to an acceptable level in an economically sensible manner.

B. False: This is incorrect. The principle of balancing the cost of controls against the impact of risks is a fundamental tenet of information security and IT risk management. Proceeding without this economic consideration would lead to inefficient allocation of resources, either by overspending on minor risks or under-protecting critical assets.

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1. National Institute of Standards and Technology (NIST). (2012). Special Publication (SP) 800-30 Revision 1, Guide for Conducting Risk Assessments.

Section 2.1, Page 5: "The risk assessment is one of the foundational activities of a risk management process... Risk assessments are used to identify, estimate, and prioritize risk to organizational operations... This information is used to inform decision makers and support risk responses by providing a basis for making sound, risk-based decisions..." This directly supports the idea that analysis provides the basis for decisions, which in a business context are inherently economic.

Section 2.3.3, Page 14: Discusses risk response, stating that organizations can "implement risk-reducing controls or countermeasures." The selection of these controls is based on the analysis of their effectiveness and cost, which is the essence of striking an economic balance.

2. Peltier, T. R. (2010). Information Security Risk Analysis (3rd ed.). Auerbach Publications.

Chapter 1, Section: "What Is Risk Analysis?", Page 3: "The main objective of an information resources risk analysis is to help management make a proper and logical decision on the selection of safeguards to protect the assets of the organization... The process should help management strike an economic balance between the impact of a risk and the cost of the protective measure." This text, a standard academic and professional reference in the field, uses nearly identical wording to the question.

3. Carnegie Mellon University, Software Engineering Institute. (2003). OCTAVE®-S Implementation Guide, v1.0. CMU/SEI-2003-HDB-003.

Section 1.2, Page 3: The OCTAVE (Operationally Critical Threat, Asset, and Vulnerability Evaluation) method, a widely respected risk assessment framework, emphasizes that the process helps an organization "make decisions about the best way to manage its risks." The entire process is designed to prioritize resources and focus protection strategies where they are most needed and provide the most value, which is an application of the economic balance principle.