Which Best Defines Residual Risk

question 10

Multiple Choice

Which best defines residual risk?

• A) risk that occurs as a result of new vulnerabilities
• B) the amount of risk remaining after countermeasures are implemented
• C) a vulnerability for which the risk has been reduced to zero
• D) the cost of implementing solutions to an assessed risk

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Definitions:

Flow-through

A business entity that passes income to the owners or investors, avoiding corporate income tax, including S corporations, partnerships, and sole proprietorships.

C Corporation

A corporate legal framework where the entity is distinct for tax purposes from its owners or shareholders.

S Corporation

A type of corporation that meets specific Internal Revenue Code requirements, allowing profits, and some losses, to be passed directly to owners' personal income without being subject to corporate tax rates.

Rental Income

Income received from renting out property or equipment. This income is reportable and taxable.