In ERM, which risk response means avoiding a risk entirely?

In ERM, which risk response means avoiding a risk entirely?

• A. Accept
• B. Mitigate
• C. Avoid
• D. Transfer

Answer: (C)

In ERM, the option that eliminates exposure to a risk is to avoid. Avoiding means not engaging in the activity or withdrawing from it entirely, so the organization no longer faces that risk at all. This is different from accepting, which means taking on the risk and dealing with potential consequences; mitigating, which reduces either the likelihood or impact; and transferring, which shifts the risk to another party such as through insurance or outsourcing. For example, if pursuing a project would expose the organization to unacceptable security risks, choosing not to pursue it avoids the risk entirely.

In ERM, the option that eliminates exposure to a risk is to avoid. Avoiding means not engaging in the activity or withdrawing from it entirely, so the organization no longer faces that risk at all. This is different from accepting, which means taking on the risk and dealing with potential consequences; mitigating, which reduces either the likelihood or impact; and transferring, which shifts the risk to another party such as through insurance or outsourcing. For example, if pursuing a project would expose the organization to unacceptable security risks, choosing not to pursue it avoids the risk entirely.