Which of the following is an example of sharing risk?
Which of the following is an example of sharing risk?
Sharing risk involves transferring a portion of the potential negative consequences to another party. Outsourcing a portion of services to a third-party service provider fits this definition, as part of the risk associated with those services is transferred to the provider.
There are 5 risk responses: acceptance/retention, avoidance, pursuit, reduction/mitigation, sharing/transfer. Option A & D reduce the risk; Option C is avoiding the risk. B is sharing since an action was taken to reduce risk by transferring a portion of the risk to the third party.
Will option A reduce the risk? Nothing is specified. It is the pattern that is changed.
Disagree, you can outsource the service but YOU CANNOT outsource the risk. Risk is still borne by the entity if something was to go wrong.
Any reason why option D is wrong.
It's not sharing but mitigation. Sharing means to share YOUR risk with YOU AND SOME OTHERS.