How does qualitative risk assessment differ from quantitative risk assessment?

Qualitative risk assessment is characterized by its reliance on subjective judgment and experience to evaluate risks, rather than numerical values. This approach often involves gathering opinions from experts or stakeholders to understand the potential impacts of risks and the likelihood of their occurrence based on qualitative factors such as severity, urgency, and context. By using descriptive categories and rankings, qualitative assessments help teams quickly identify and prioritize risks without the need for complex calculations or data analysis.

In contrast, quantitative risk assessment employs numerical data and statistical methods to estimate the likelihood and consequences of risks in measurable terms. This approach often involves detailed calculations, data analysis, and the use of metrics to derive precise risk levels. The inherent subjectivity present in qualitative assessments is replaced with mathematical confidence levels and probabilities in quantitative assessments.

The other options present inaccuracies in the context of qualitative and quantitative risk assessments. For instance, while qualitative assessments can be faster in some situations due to their subjective nature, this is not universally true. Additionally, qualitative assessments do not specifically deal with only physical risks, nor do they limit their scope to historical data; they may encompass various types of risks, including reputational or strategic. Similarly, quantitative assessments can utilize historical data to inform their models and predictions, contrasting the assertion that qualitative focuses on that aspect