What is a risk assessment?

A risk assessment is fundamentally a systematic process aimed at identifying and evaluating potential risks associated with a specific activity or undertaking. This systematic approach allows organizations to understand the likelihood of various risks occurring, the potential impact of those risks, and the measures that can be put in place to mitigate or manage those risks. The comprehensive analysis helps in decision-making regarding risk management strategies and resource allocation.

This process often involves both qualitative and quantitative methods, enabling organizations to prioritize risks based on their severity and likelihood. By conducting a thorough risk assessment, businesses can proactively address vulnerabilities and strengthen their overall risk management framework. Thus, option B encapsulates the essence of what a risk assessment embodies.