The correct option is To state the amount and types of risk the organization is prepared to accept.

A risk appetite statement articulates how much and what kinds of risk the credit union is willing to tolerate while pursuing its objectives. It is a governance level directive that guides strategic decisions, capital allocation, and the design of controls so that risk taking stays aligned with the organizations goals.

To describe the approach for ongoing risk monitoring and reporting is incorrect because monitoring and reporting are operational activities that measure and communicate risk relative to the appetite. They support governance but they are not the purpose of the appetite statement.

Cloud Security Command Center is incorrect because it names a vendor security product and not a governance statement about acceptable risk. Tools can help detect and manage risks but they do not define organizational tolerance.

To define technical specifications for security controls is incorrect because technical specifications belong in control standards and baselines. A risk appetite sets high level tolerance and informs how strict those technical controls need to be.

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