TOPIC: RISK STRATEGY: QUERY ON RISK TRANSFER

While identifying risks in your project, your team cannot find an efficient way to reduce the impact and probability or to insure against one of the risks. The relevant work is integral to the project; thus, you cannot simply remove the work package. There is no suitable company to outsource the work to either. What is the best course of action in this situation?
SELECT THE CORRECT ANSWER
A. Identify ways to transfer the risk
B. Accept the risk and have contingency reserves
C. Identify ways to avoid the risk
D. Keep looking for ways to mitigate the probability and impact of the risk
Correct Option:A
EXPLANATION
Transferring risk may increase costs but will assist in moving the risk from the primary to another group or entity, lowering the overall risk exposure.

My query:
Shouldn't it be B? Question says cannot insure against one of the risks or outsource, that means it cannot be transferred.
Are there other ways to transfer risk as well?

Deepti,

I agree with you. The question explicitly states that insurance is not available. I think it's "B"

Another moderator may want to chime in.

Harry

I agree with Harry.
Based on the scenario described, I would eliminate all the other options:

• Your team cannot find an efficient way to reduce the impact and probability or to insure against one of the risks. This would suggest both A and D are not viable options.
• The relevant work is integral to the project; thus, you cannot simply remove the work package. There is no suitable company to outsource the work to either. For me this implies that C cannot be applied, either.

So I would also go for option B.

Could you please include information about where you found this sample question?

Gabriella