Risk response

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Risk management.

A choice in relation to an identified risk which can be categorised broadly as the decision whether to:

  1. Avoid the risk, or
  2. Accept it.


The broad choice to 'accept' a risk can be further classified according to whether the firm then retains, reduces or transfers the risk.

Using this model, the classes of potential risk responses are therefore four, namely:

  1. Avoid
  2. Accept and retain
  3. Accept and reduce, or
  4. Accept and transfer.


See also