Question

__________ can be to avoid the risk, mitigate the risk, or accept the risk.

a. A risk response plan
b. A risk assessment
c. A risk management strategy
d. A risk impact statement

Answer 1

A risk management strategy involves actions to avoid, mitigate, or accept risks, and is important in preparing for potential devastating threats, much like purchasing insurance for low-probability but high-impact events.

Step-by-step explanation:

The correct answer to the question is c. A risk management strategy. This involves deciding on how to approach potential risks, which can include choosing to avoid, mitigate, or accept them. Avoiding the risk means taking actions to prevent the risk from affecting the project. Mitigating the risk involves reducing the impact or likelihood of the risk, should it occur. Accepting the risk means acknowledging the possibility of the risk materializing without taking any preemptive actions to prevent or mitigate it.

Considering asymmetric risk is crucial, especially when facing potential threats that could have devastating consequences. A risk management strategy is essentially akin to buying insurance; it allows for preparation against low-probability but high-impact events. Effective risk management strategies ensure that even if a threat does not materialize, the consequences of being unprepared for a 'game over' scenario are avoided.