What method of dealing with risk occurs when individuals do

What method of dealing with risk occurs when individuals do a cost benefit analysis and determine that the cost of the benefits outweigh the cost of the potential loss?

A. Risk reduction

B. Risk rejection

C. Risk transference

D. Risk acceptance

Solution

D. Risk acceptance means that the risk has been analyzed and the individuals responsible have decided that they will accept such risk. Answer A is incorrect because risk reduction occurs when a countermeasure is implemented to alter or reduce the risk. Answer B is incorrect because risk rejection means that the responsible party has decided to ignore the risk. Answer C is incorrect because risk transference transfers the risk to a third party.