CERTIFIED-IN-CYBERSECURITY · Question #80
When a company hires an insurance company to mitigate risk, which risk management technique is being applied?
The correct answer is C. Risk transfer. Risk transfer is a risk management strategy that contractually shifts a pure risk from one party to another (in this case, to an insurance company). Risk avoidance consists in stopping activities and exposures that can negatively affect an organization and its assets. Risk…
Question
When a company hires an insurance company to mitigate risk, which risk management technique is being applied?
Options
- ARisk avoidance
- BRisk mitigation
- CRisk transfer
- DRisk tolerance
How the community answered
(61 responses)- A7% (4)
- B2% (1)
- C89% (54)
- D3% (2)
Explanation
Risk transfer is a risk management strategy that contractually shifts a pure risk from one party to another (in this case, to an insurance company). Risk avoidance consists in stopping activities and exposures that can negatively affect an organization and its assets. Risk mitigation consists of mechanisms to reduce the risk. Finally, risk tolerance is the degree of risk that an investor is willing to endure.
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