Which of the following methods of handling risk works by usi

Which of the following methods of handling risk works by using a third party to absorb a portion of the risk?
A. Risk reduction
B. Risk transference
C. Risk acceptance
D. Risk rejection

Solution

B. The purchase of insurance to transfer a portion or all of the potential cost of a loss to third party is known as risk transference. All other answers are incorrect: Risk reduction implements a countermeasure, risk acceptance deals with risk by accepting the potential cost, and risk rejection pretends it doesn’t exist.