Which of the following presents the GREATEST risk for the continued existence of an enterprise?

Risk appetite is the amount of risk an organization is willing to accept in pursuit of its objectives. Risk tolerance is the acceptable variation around that risk appetite. Risk capacity, however, represents the maximum amount of risk an organization can absorb before it faces critical failure. When actual risk, and even the risk appetite, exceed risk capacity, the organization's very survival is threatened. This scenario implies that potential losses could exceed the resources available to the organization, potentially leading to insolvency or collapse.

While exceeding risk appetite (B) is undesirable and requires action, it doesn't necessarily mean the organization's existence is in immediate danger. Annual reviews (A) are a good practice.