What is a 'risk matrix' used for in risk management?

A risk matrix is an essential tool in risk management that allows for the evaluation of risks by plotting their probability of occurrence against their potential impact. This visual representation helps decision-makers prioritize risks based on their severity and likelihood, making it easier to allocate resources and develop appropriate mitigation strategies.

By categorizing risks into different zones on the matrix, such as low, medium, and high risk, organizations can identify which risks require immediate attention and which can be monitored over time. This ensures that the most critical threats are addressed promptly and effectively, enhancing overall security and resilience.

The other options represent different aspects of risk management but do not specifically capture the primary function of a risk matrix. Documenting identified risks, developing security policies, and performing financial risk assessments are all important components of risk management, but they do not serve the same specific purpose of risk evaluation and prioritization that a risk matrix provides.