Risk Assessment Methodology - Moyer Scientific Research LLC

🎯 Overview

Guided Risk Assessment represents a paradigm shift from subjective risk matrices to quantitative, data-driven security analysis. By modeling your infrastructure as a probabilistic attack graph and applying advanced statistical methods, we calculate actual probabilities of successful attacks rather than relying on arbitrary "high/medium/low" ratings.

This approach enables objective prioritization of security investments based on measurable risk reduction and quantifiable return on investment.

📊 Traditional vs. Quantitative Risk Assessment

Aspect	Traditional Approach	Quantitative Approach
Risk Calculation	Subjective ratings (1-5)	Probability distributions (0-1)
Likelihood Assessment	"High", "Medium", "Low"	Actual percentages (e.g., 34.7%)
Impact Measurement	Qualitative descriptions	Dollar amounts with confidence intervals
Prioritization	Based on opinion/intuition	Based on expected loss reduction
ROI Calculation	Subjective/impossible	Precise cost-benefit analysis
Repeatability	Varies by assessor	Consistent, reproducible

🔬 Core Methodology

Attack Graph Modeling

Your network infrastructure is represented as a directed graph where nodes are systems/states and edges are attack transitions with associated probabilities based on vulnerability data, control effectiveness, and threat intelligence.

Markov Chain Monte Carlo

We use MCMC simulation to explore all possible attack paths through your infrastructure, calculating probability distributions for successful compromise of critical assets across thousands of simulated attack scenarios.

Bayesian Networks

Dependencies between security controls, vulnerabilities, and attack vectors are modeled as Bayesian probability networks, allowing us to update risk estimates as conditions change.

Threat Intelligence

Real-world attack data, vulnerability exploitability scores (CVSS, EPSS), and threat actor behavior patterns inform probability assignments, ensuring models reflect actual risk.

Loss Magnitude Analysis

Historical breach costs, regulatory penalties, business interruption impacts, and recovery expenses are quantified with confidence intervals based on industry data and organizational context.

Control Effectiveness

Security controls are modeled by their actual reduction in attack success probability, measured through penetration testing, breach data, and vendor validation studies.

Risk Calculation Formula:

Risk = Σ(P(attack_path_i) × Loss(target_j) × P(exploitation|path_i))

Where risk is the sum across all attack paths of: the probability of successfully traversing that path, times the expected loss if the target is compromised, times the conditional probability of successful exploitation given the attacker reached that node.

📝 Example Calculation

Scenario: Risk of database compromise via web application

P(phishing success) = 0.15 (15% based on training/controls)
P(lateral movement | phishing) = 0.40 (network segmentation reduces)
P(database access | lateral) = 0.65 (access controls partially effective)
Expected loss = $2.4M (based on data sensitivity/records)

Risk = 0.15 × 0.40 × 0.65 × $2,400,000 = $93,600 annual expected loss

Adding MFA: Reduces P(lateral movement) to 0.10 → New risk = $23,400 → Saves $70,200/year (MFA cost $15K/year = 368% ROI)

✅ Benefits

Objective Prioritization: Remediation decisions based on measurable risk reduction rather than subjective severity ratings
ROI Justification: Calculate precise cost-benefit for security investments to optimize budget allocation
Risk Quantification: Express organizational risk in dollars rather than vague "high/medium/low" ratings
Board Communication: Present risk in business terms (expected annual loss) that executives understand
Compliance Mapping: Link quantitative metrics to regulatory requirements for audit purposes
Trend Analysis: Track how risk evolves over time as you implement controls and threats change

Ready to Transform Your Risk Assessment?

This methodology is currently under development. Express your interest to be notified when beta testing begins.

Express Interest ← Back to Services