How are risks classified when they fall within the risk appetite?

When risks are classified as falling within the risk appetite, they are considered acceptable and, therefore, subjected to monitoring. Risk appetite refers to the amount and type of risk that an organization is willing to pursue or retain in order to achieve its objectives. When risks are within this predefined limit, organizations will typically implement controls or establish processes to track these risks.

Monitoring accepted risks allows organizations to keep an eye on them and ensure they do not escalate beyond acceptable levels, potentially leading to negative impacts. This proactive approach enhances an organization's ability to respond effectively if a risk begins to shift or if conditions change, warranting a reassessment of the risk's status or controls.

In contrast, the other options describe responses that are not appropriate for risks classified within the risk appetite. Completely avoiding risks would imply that they are outside of the acceptable parameters, while ignoring them would leave an organization vulnerable to unforeseen consequences. Transferring risks entails passing on the risk to another party, typically through contracts or insurance, which again indicates that the risk is not within the organization's appetite.