Question

Choose the best definition of risk avoidance.

a) Risk avoidance is when a company decides to accept the risk but to minimize its impact if it occurs.
b) Risk avoidance is when an inherent risk is present, but the organization chooses not to act.
c) Risk avoidance is the shifting of the risk to a third party.
d) Risk avoidance eliminates the risk by completely avoiding the events causing the risk.

Answer 1

Risk avoidance is the strategy of eliminating a risk by completely avoiding the events that could cause the risk.

Step-by-step explanation:

Risk avoidance is the strategy of eliminating a risk by completely avoiding the events that could cause the risk. In this approach, the organization takes steps to prevent any exposure to the risk and does not engage in activities that may lead to the occurrence of the risk. This is different from other risk management strategies, such as risk acceptance or risk mitigation, where the organization acknowledges the risk but takes measures to minimize its impact if it occurs.