Which risk mitigation strategies include outsourcing services and purchasing insurance?Question 18Select one:transferacceptancereductionavoidance

1. Break Down the Problem

The question is asking to identify which risk mitigation strategy is characterized by outsourcing services and purchasing insurance. We have four potential options: transfer, acceptance, reduction, and avoidance.

2. Relevant Concepts

• Transfer: Shifting the risk to another party (e.g., insurance).
• Acceptance: Acknowledging the risk without taking action to prevent it.
• Reduction: Implementing measures to minimize the impact or likelihood of the risk.
• Avoidance: Altering plans to eliminate the risk altogether.

3. Analysis and Detail

Outsourcing services can be considered a form of risk transfer, as it shifts certain responsibilities and associated risks to another party (like a contractor or service provider). Similarly, purchasing insurance also transfers the financial risk of certain events (like property damage or liability) to the insurance company.

4. Verify and Summarize

Both outsourcing and buying insurance relate directly to the strategy of transferring risk. Based on the definitions and analysis above, the correct answer is:

Final Answer

Transfer