What distinguishes qualitative risk assessment from quantitative risk assessment?

Qualitative risk assessment is distinguished by its focus on subjective analysis rather than numerical data. This approach seeks to understand risks through descriptive methods, often involving expert opinions, interviews, and assessments of the internal and external environment of an organization. It emphasizes the contextual factors, influences, and implications of risks, which cannot be easily quantified.

In contrast, quantitative risk assessment relies on numerical data and statistical methods to evaluate risks, often providing a more objective and measurable perspective. This can include calculations such as probability distributions and risk ratings based on historical data.

The other options present misunderstandings of the characteristics of qualitative and quantitative assessments. For instance, qualitative assessment does not inherently utilize numerical data, while quantitative assessments are not limited to only financial risks; they can apply to any area where measurable data can be analyzed. Additionally, while qualitative assessments often involve categorization through descriptive methods, quantitative assessments might also categorize risks based on statistical analysis or numerical outcomes.