Final answer:
The correct answer to the student's question is A. Avoidance, which means to evade or eliminate the risk entirely. Risk avoidance differs from mitigation, acceptance, or transfer strategies and is about being proactive to protect a project from potential risks.
Step-by-step explanation:
The term being described in the question refers to how a project team can handle potential risks. When a risk is evaded, it means that the team has taken actions to completely avoid the risk by eliminating the cause of the risk event or by altering the project plan. This proactive approach ensures that the project is not impacted by the potential risk. The correct answer is A. Avoidance. This is in contrast to risk mitigation, which seeks to reduce the impact of a risk, risk acceptance, which involves recognizing the risk but proceeding with the project plan despite it, and risk transfer, which involves shifting the risk to another party.
In the context provided by Figure 20.1, we see a clear example of risk decision-making. If a potential devastating threat is not believed to be real, then the team might opt for Plan A; however, if the threat is taken seriously, Plan B, which mitigates the risk, might be appropriate. The cost of pursuing Plan B unnecessarily does not outweigh the catastrophic consequences of the threat being real and not being adequately prepared with Plan A. This demonstrates the importance of considering risk avoidance in project planning.