What term refers to the numerical representation of risk factoring both severity and probability?

The correct term that refers to the numerical representation of risk, considering both severity and probability, is known as the Quantitative Risk Assessment. This approach utilizes statistical methods and modeling techniques to quantify the potential impact of risks and their likelihood of occurrence, providing a structured framework for understanding and evaluating risk.

Quantitative Risk Assessment enables organizations to measure risks in numerical form, which can then be compared and prioritized effectively. This method facilitates informed decision-making by concentrating not only on the potential consequences of an event (severity) but also on how likely it is to happen (probability). By combining these two dimensions, organizations can derive a comprehensive view of the risks they face.

In contrast, the other options like the Risk Assessment Code (RAC), Hazard Risk Index, and Risk Severity Code do not encapsulate the complete methodology of incorporating both severity and probability into a numerical risk representation. While they may refer to various risk management concepts, they don’t specifically address the holistic quantification that is characteristic of a Quantitative Risk Assessment.