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The question is incorrect. It should state, Pick 3.
The selection of an appropriate set of KRIs benefits the organization by:
• Providing an early warning (forward-looking) signal that a high risk is emerging to enable management to take proactive action (before the risk actually becomes a loss)
• Providing a backward-looking view on risk events that have occurred, enabling risk responses and management to be improved.
• Enabling the documentation and analysis of trends
• Providing an indication of the enterprise’s risk appetite and tolerance through metric setting (i.e., KRI thresholds)
• Increasing the likelihood of achieving the enterprise’s strategic objectives
• Assisting in continually optimizing the risk governance and management environment
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