What differentiates qualitative risk analysis from quantitative risk analysis?

The distinction between qualitative and quantitative risk analysis lies in their foundational approaches to assessing risks. Qualitative risk analysis fundamentally relies on subjective judgment, often using techniques like expert opinions, interviews, and brainstorming sessions to identify and prioritize risks based on their potential impact and likelihood. This approach allows for a quicker, more intuitive understanding of risks, especially when precise numerical data may not be available.

In contrast, quantitative risk analysis employs numerical techniques to assess and evaluate risks in a more objective manner. It often incorporates statistical methods, modeling, and mathematical calculations to quantify the probability and impact of risks. This analysis generates specific figures and metrics, enabling organizations to understand the financial implications of risks more accurately.

Therefore, the correct answer reflects the essence of these two approaches: qualitative analysis being subjective and judgment-based, while quantitative analysis is grounded in objective numerical evaluation.