A part of a project deals with the hardware work. As a project manager, you have decided to hire a company to deal with all hardware work on the project. Which type of risk response is this?
When you are hiring a third party to own risk, it is known as transference risk response. Transference is a strategy to mitigate negative risks or threats. In this strategy, consequences and the ownership of a risk is transferred to a third party. This strategy does not eliminate the risk but transfers responsibility of managing the risk to another party. Insurance is an example of transference. Answer: B is incorrect. The act of spending money to reduce a risk probability and impact is known as mitigation. Answer: A is incorrect. Exploit is a strategy that may be selected for risks with positive impacts where the organization wishes to ensure that the opportunity is realized. Answer: D is incorrect. When extra activities are introduced into the project to avoid the risk, this is an example of avoidance.
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