What does FAIR stand for in risk management?

FAIR stands for "Factor Analysis of Information Risk." This framework is designed to provide a structured approach to quantifying and analyzing information security risk in a business context. The FAIR methodology enables organizations to better understand the potential impact of risks on their assets by breaking down complex risks into manageable components. This quantification allows for more accurate decision-making regarding risk management strategies and resource allocation.

By focusing on factors that contribute to risk levels, FAIR helps organizations not only assess the likelihood of risk events occurring but also determine the potential financial impact should those risks materialize. This dual approach of qualitative and quantitative analysis is pivotal in managing information security risks effectively.

The other options do not accurately represent the FAIR framework as established in risk management literature. Options that suggest assessments for individual risks or fundamental assessments do not align with the specific analytical process that FAIR embodies, which is focused on understanding and articulating risk in terms of information security.