Magnitude of risk

Risk Magnitude is generaly calculated by its probablity ( frequency) and impact.

Once you have Identified the risks, each risk should be rated on scale of 0 - 1 for probablility and impact.

For eg: Risk of Earthquake
Risk of software network malfunction.

Risk 1 has high impact and low probablity of occurance
Risk 2 has low impact and high probablity of occurance.

Generally organization's process assests, have a probablity and impact matrix, which can be reused to calculate magnitude of risks.

After you calculate the magnitude, next step is to prioritize the risks and determine the risk response.