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The TAM is a simple method of performing a Risk Assessment. To begin, we have an asset. An information asset may be a piece of equipment, some data, or confidential information. A vulnerability contributes to the risk that the asset may be damaged, which exposes the company to loss and generates the necessity for a control or safeguard. Let's say that our data processing equipment is vulnerable to power outage. The power outage would pose some risk of that asset being damaged or unavailable, resulting in the exposure or inherent risk. Inherent risk is the highest possible risk we have if there are no controls in place.

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