The question asks to identify the type of risk that belongs in Box 2 of the likelihood/impact matrix, which represents risks with both High Likelihood and High Impact. This quadrant contains the most critical risks that an organisation faces, often considered intolerable and requiring immediate avoidance or reduction strategies.

Among the given options, 'hazard' is the most appropriate fit. In risk management, particularly from a health, safety, and environmental perspective, a hazard that has a high likelihood of occurring and would result in a high-impact consequence (e.g., fatality, major environmental damage) is deemed an intolerable risk. The primary strategy for such risks is avoidance—ceasing the activity or fundamentally re-engineering the process to eliminate the hazard.

B. financial: Financial risks (e.g., currency fluctuations, credit default) vary in likelihood and impact and are typically managed through hedging or diversification, not always complete avoidance.

C. strategic: Strategic risks are often taken intentionally to achieve objectives (e.g., entering a new market). They are managed and monitored, not necessarily classified as hazards to be avoided.

D. operational: While some operational risks can be high/high (e.g., critical supplier failure), many are inherent to business-as-usual and are managed through controls and contingency plans to an acceptable level.

1. ISO 31000:2018

Risk management — Guidelines. This international standard outlines the risk management process. In section 6.5.2 'Selection of risk treatment options

' it is established that 'avoiding the risk by deciding not to start or continue with the activity that gives rise to the risk' is a primary option

which is most applicable to risks assessed as having extremely high likelihood and impact.

2. Health and Safety Executive (HSE). (2001). Reducing risks

protecting people (R2P2). London: HSE Books. This official UK government publication discusses the concept of tolerability of risk. It explicitly defines a region of risk that is "intolerable" and cannot be justified in any ordinary circumstances (p. 10

para 39). High-likelihood

high-consequence hazards fall squarely into this intolerable region

reinforcing the choice.

3. Hopkin

P. (2018). Fundamentals of Risk Management: Understanding

Evaluating and Implementing Effective Risk Management. 5th ed. Kogan Page. This text

aligned with CIPS curriculum principles

describes the top-right quadrant of the risk matrix as containing risks that "will require immediate action" and where the response may be to "terminate the activity" (i.e.

avoidance). This aligns best with the concept of an intolerable hazard.