Cybersecurity Risk Assessment

Dr. Greg Bernstein

January 12th, 2021

Risk Assessment and Management


  • (ISC)2 CISSP Certified Information Systems Security Professional Official Study Guide, 8th Edition by Darril Gibson; James M Stewart; Mike Chapple Published by Sybex, 2018. “CISSP Study Guide”, Chapter 2.

  • NIST Special Publication 800-30Revision 1. Guide for ConductingRisk Assessments. Good free source for definitions of terms and concepts. Does not include quantitative risk assessment.

  • NIST Special Publication 800-37 Revision 2 Risk Management Framework forInformation Systems and OrganizationsA System Life Cycle Approach for Security and Privacy. Policy document example not needed to be read for this class.


From the CISSP Study Guide

Security is aimed at preventing loss or disclosure of data while sustaining authorized access. The possibility that something could happen to damage, destroy, or disclose data or other resources is known as risk.

My take ⇒ Something bad can happen

Risk Management

From the CISSP Study Guide

Risk management is a detailed process of identifying factors that could damage or disclose data, evaluating those factors in light of data value and countermeasure cost, and implementing cost-effective solutions for mitigating or reducing risk. The overall process of risk management is used to develop and implement information security strategies.


From the CISSP Study Guide

An asset is anything within an environment that should be protected. It is anything used in a business process or task. It can be a computer file, a network service, a system resource, a process, a program, a product, an IT infrastructure, a database, a hardware device, intellectual property, …

Asset Valuation

From the CISSP Study Guide

Asset valuation is a dollar value assigned to an asset based on actual cost and nonmonetary expenses. These can include costs to develop, maintain, administer, advertise, support, repair, and replace an asset; they can also include more elusive values, such as public confidence, industry support, productivity enhancement, knowledge equity, and ownership benefits.


From the CISSP Study Guide

Any potential occurrence that may cause an undesirable or unwanted outcome for an organization or for a specific asset is a threat. Threats are any action or inaction that could cause damage, destruction, alteration, loss, or disclosure of assets or that could block access to or prevent maintenance of assets. Threats can be large or small and result in large or small consequences. They can be intentional or accidental. They can originate from people, organizations, hardware, networks, structures, or nature.

Threat Agent

From the CISSP Study Guide

Threat agents intentionally exploit vulnerabilities. Threat agents are usually people, but they could also be programs, hardware, or systems.

Threat Event

From the CISSP Study Guide

Threat events are accidental and intentional exploitations of vulnerabilities. They can also be natural or man-made. Threat events include fire, earthquake, flood, system failure, human error (due to a lack of training or ignorance), and power outage.


From the CISSP Study Guide

The weakness in an asset or the absence or the weakness of a safeguard or countermeasure is a vulnerability.

In other words, a vulnerability is a flaw, loophole, oversight, error, limitation, frailty, or susceptibility in the IT infrastructure or any other aspect of an organization. If a vulnerability is exploited, loss or damage to assets can occur.


From the CISSP Study Guide

Exposure is being susceptible to asset loss because of a threat; there is the possibility that a vulnerability can or will be exploited by a threat agent or event.

Quantifying Risk

From the CISSP Study Guide

Risk is the possibility or likelihood that a threat will exploit a vulnerability to cause harm to an asset. It is an assessment of probability, possibility, or chance. The more likely it is that a threat event will occur, the greater the risk. Every instance of exposure is a risk. When written as a formula, risk can be defined as follows:

\[risk = threat * vulnerability\]


A safeguard, security control, or countermeasure is anything that removes or reduces a vulnerability or protects against one or more specific threats. A safeguard can be installing a software patch, making a configuration change, hiring security guards, altering the infrastructure, modifying processes, improving the security policy, training personnel more effectively, electrifying a perimeter fence, installing lights, and so on… Safeguards are the only means by which risk is mitigated or removed.

Elements of Risk

From the CISSP Study Guide

Risk Diagram

NIST Risk Model

From NIST SP800-30rev1

NIST Model

Quantitative Risk Analysis

The Steps

From the CISSP Study Guide

  1. Inventory assets, and assign a value (asset value, or AV).

  2. Research each asset, and produce a list of all possible threats of each individual asset. For each listed threat, calculate the exposure factor (EF) and single loss expectancy (SLE).

  3. Perform a threat analysis to calculate the likelihood of each threat being realized within a single year—that is, the annualized rate of occurrence (ARO).

The Steps - continued

From the CISSP Study Guide

  1. Derive the overall loss potential per threat by calculating the annualized loss expectancy (ALE).

  2. Research countermeasures for each threat, and then calculate the changes to ARO and ALE based on an applied countermeasure.

  3. Perform a cost/benefit analysis of each countermeasure for each threat for each asset. Select the most appropriate response to each threat.

Quantitative Risk Flow

Flow diagram

Reality Check 1

  • Seriously Professor you are going to do all these steps?
  • There are a lot of “research” steps here, who has time?
  • Have you ever done anything like this in your entire career

Reality Check 2

  • In a large company or insurance firm you may be part of a team conducting this analysis
  • You may only be ask to perform a subset of these steps
  • You may get (buy, be given) “research” results to use for certain steps

My Experience 1

Example threats in terms of frequency of occurrence (guess my assets):

  • Burnout
  • Backhoes
  • Anchor Drags
  • Tornado, Hurricanes, Earthquakes

My Experience 2

My customers asset: fiber optic based communication networks

  • Most frequent threat: laser transmitter burnout
  • Backhoe (construction equipment), Ship anchors cutting fiber optic cables

My Experience 3

For important network hardware suppliers (like the company I was at) are required to compute reliability information based on establish failure rates for devices.

We then offer many different safeguards (in networking these are known as protection and restoration schemes) each with different advantages and costs.

Dealing with Risk


From the CISSP Study Guide

  1. Reduce or mitigate
  2. Assign or transfer
  3. Accept
  4. Deter
  5. Avoid
  6. Reject or ignore

Risk Mitigation

From the CISSP Study Guide

Risk mitigation is the implementation of safeguards and countermeasures to eliminate vulnerabilities or block threats. Picking the most cost-effective or beneficial countermeasure is part of risk management, but it is not an element of risk assessment. In fact, countermeasure selection is a post-risk-assessment or post-risk-analysis activity.

Risk Assignment

From the CISSP Study Guide

Assigning risk or transferring risk is the placement of the cost of loss a risk represents onto another entity or organization. Purchasing insurance and outsourcing are common forms of assigning or transferring risk.

Risk Acceptance

From the CISSP Study Guide

Accepting risk, risk tolerance, or acceptance of risk is the result after a cost/benefit analysis shows countermeasure costs would outweigh the possible cost of loss due to a risk. It also means that management has agreed to accept the consequences and the loss if the risk is realized.


Risk Avoidance

From the CISSP Study Guide

Risk avoidance is the process of selecting alternate options or activities that have less associated risk than the default, common, expedient, or cheap option.

Risk Rejection

From the CISSP Study Guide

A final but unacceptable possible response to risk is to reject risk or ignore risk. Denying that a risk exists and hoping that it will never be realized are not valid or prudent due-care responses to risk.

This Class

  • Risk Mitigation
  • Risk Avoidance
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