Final answer:
Risk acceptance is the strategy that necessitates an identified risk that those involved understand the potential cost/damage and agree to live with it.
Step-by-step explanation:
The strategy that necessitates an identified risk that those involved understand the potential cost/damage and agree to live with it is Risk acceptance.
Risk acceptance is the strategy of acknowledging a risk and choosing to tolerate it rather than taking measures to avoid it or mitigate its consequences. This strategy is often used when the potential costs or damages associated with the risk are deemed acceptable and the stakeholders are willing to bear them.
When a risk is accepted, it means that the parties involved have analyzed the situation and determined that the potential impacts of the risk are tolerable or that mitigation efforts would be too costly or impractical. This is in contrast to strategies like Risk avoidance, where the goal is to eliminate the risk entirely, or Risk mitigation, which aims to reduce the impact of the risk.