Question

Traditional risk responses available to management are

a. defeat, amplify, purchase, and accept.
b. accept, mitigate, cancel, and amplify.
c. accept, mitigate, transfer, and avoid.
d. accept, implement internal controls, and ignore.

Answer 1

The traditional risk responses available to management are accept, mitigate, transfer, and avoid. These responses help management address different types of risks that their organization may face.

Step-by-step explanation:

The traditional risk responses available to management are accept, mitigate, transfer, and avoid. These responses help management address different types of risks that their organization may face. Accepting a risk means acknowledging its existence and not taking any specific action to mitigate it. Mitigation involves taking steps to reduce the likelihood or impact of a risk. Transferring a risk means shifting the responsibility and potential consequences of the risk to another party, such as through insurance or a contractual agreement. Avoiding a risk means deliberately steering clear of activities or situations that could expose the organization to that risk. For example, a company may choose to accept the risk of a minor equipment breakdown by not investing in expensive preventive maintenance. On the other hand, the same company may choose to transfer the risk of a major liability claim by purchasing comprehensive liability insurance.