Which term describes a conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable?

Which term describes a conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable?

• A. A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable.
• B. A plan to transfer risk to another party.
• C. An action that increases potential losses.
• D. An event where no harm occurs.

Answer: (A)

Risk avoidance is a deliberate choice to not take on a activity or to refrain from a behavior in order to prevent or reduce losses. By opting out of the risky action, you lower both how often a loss occurs and how severe it could be, and you often make outcomes more predictable because the exposure is removed. In practical terms, this means avoiding a maneuvre or route that would create high risk, choosing safer alternatives, or declining a assignment when the risk outweighs the benefit. The other options describe transferring risk to someone else, doing something that increases risk, or an situation where no harm occurs—none of which capture the idea of consciously not acting to reduce risk.

Risk avoidance is a deliberate choice to not take on a activity or to refrain from a behavior in order to prevent or reduce losses. By opting out of the risky action, you lower both how often a loss occurs and how severe it could be, and you often make outcomes more predictable because the exposure is removed. In practical terms, this means avoiding a maneuvre or route that would create high risk, choosing safer alternatives, or declining a assignment when the risk outweighs the benefit. The other options describe transferring risk to someone else, doing something that increases risk, or an situation where no harm occurs—none of which capture the idea of consciously not acting to reduce risk.