Question

What is risk management followed by?

1) Efforts to maximize event outcomes and probabilities
2) Efforts to minimize event outcomes and probabilities
3) Efforts to ignore event outcomes and probabilities
4) Efforts to control event outcomes and probabilities

Answer 1

Risk management is followed by efforts to control event outcomes and probabilities, balancing between mitigating risk and ensuring rewards. The correct option is 4.

Step-by-step explanation:

Risk management is generally followed by efforts to control event outcomes and probabilities. These efforts aim to mitigate risks and minimize negative impacts while maximizing positive outcomes. Proper risk management involves considering the likelihood and impact of potential events and making informed decisions to maintain a balance between risk and reward.

Like insurance policies, risk management strategies are designed to protect against low-probability but high-consequence events. For example, a state considers all probable variables in its strategic decision-making process to calculate risk and make policies that are based on maximizing predicted net benefits.