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…

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.