Using the FIRM scorecard which of the following risks could a risk manager quantify? 1. Loss of income. 2. Financial gain. 3. Reputational damage.

Risk quantification involves assigning numerical, typically monetary, values to the potential impact of a risk. Within risk management frameworks, financial impacts are the most straightforward to quantify. "Loss of income" (a negative financial impact) and "financial gain" (a positive financial impact or opportunity) are both direct, tangible monetary figures that can be calculated or estimated with a relatively high degree of certainty. In contrast, "reputational damage" is an intangible risk. While its secondary effects (e.g., reduced sales) can be translated into financial terms, the primary impact is non-monetary and is notoriously difficult to quantify directly. Therefore, a risk scorecard focused on quantification would most readily handle loss of income and financial gain.

B. 1 and 3: This option is incorrect because reputational damage is an intangible risk that is primarily assessed qualitatively, unlike the directly quantifiable nature of income loss.
C. 2 and 3: This option is incorrect for the same reason as B; reputational damage is not as directly quantifiable as financial gain.

1. ISO 31000:2018, Risk management — Guidelines. Section 6.4.3, "Risk analysis," explains that the consequences of risk can be tangible or intangible and that the analysis can be qualitative, semi-quantitative, or quantitative. This supports the distinction between easily quantifiable financial impacts and harder-to-quantify intangible impacts like reputational damage.

2. FERMA (The Federation of European Risk Management Associations). (2003). A Risk Management Standard. In section 4.3.3, "Risk Estimation," the standard explicitly states, "The consequence of an event can be expressed in either quantitative (e.g. financial) or qualitative (e.g. reputational damage) terms." This directly contrasts the quantifiable nature of financial risks with the qualitative nature of reputational risks.

3. Eccles, R. G., Newquist, S. C., & Schatz, R. (2007). Reputation and Its Risks. Harvard Business Review, 85(2), 104–114. This article discusses the nature of reputational risk as a significant corporate asset that is inherently difficult to measure and manage with traditional quantitative risk tools. It highlights that while the financial consequences are real, the reputational asset itself is intangible.