Cost of Risk exposure is calculated to measure the impact of a risk in financial terms.

If the cost of exposure is less, organizations may ignore or accept the risk rather than mitigating it.

Following is how you would find the cost of risk exposure:

Cost of Risk Exposure = Probability the risk occurring * Impact of the Risk ($)

Example:

Consider Risk A has a probability of 10% occurring and impact of $10,000.

In this case, the cost of Risk Exposure is = 10 % * 10,000 = 0.1 * 10 000 = $ 1000