What are the four basic strategies for managing risk?

The four basic strategies for managing risk—transfer, avoid, reduce, and accept—provide a framework that organizations can use to navigate uncertainties effectively.

Transferring risk involves shifting the risk to another party, often through insurance or outsourcing, which allows an organization to mitigate potential losses without directly handling the risk itself. Avoiding risk means altering plans to sidestep potential risks altogether, which can be a proactive strategy to eliminate exposure. Reducing risk involves implementing measures that lower the probability or impact of risks, such as adopting new technologies or best practices. Lastly, accepting risk means acknowledging the presence of risk and deciding to proceed despite it, often because the potential benefits outweigh the potential downsides or because the cost of mitigation is prohibitive.

The other options present variations on risk management strategies but do not encompass the full scope of the widely recognized approaches. For instance, while "minimize" and "delegate" may reflect actions taken within individual strategies, they do not represent established classifications of risk management. Similarly, "combine" and "focus" are not standard approaches and do not convey the primary methods accepted in risk management theory. The fourth choice tries to incorporate assessment and planning but falls short of articulating the core strategies effectively. Overall, option A accurately