If a Firm Establishes a Back-Up Plan, They Are Engaging

question 35

Multiple Choice

If a firm establishes a back-up plan, they are engaging in

• A) contingency planning.
• B) crisis management.
• C) investment reduction.
• D) differentiation.
• E) none of these.

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Definitions:

Risk Sharing and Transfer Agreements

Contracts where two or more parties agree to distribute among themselves the losses or benefits arising from particular risks.

Monte Carlo Simulation

A computational algorithm that uses repeated random sampling to obtain numerical results, typically used to assess risk and uncertainty in prediction and modeling.

Contingency Funds

Reserved money set aside by organizations or projects to address unforeseen events or emergencies that may incur additional costs.

Risk Profile

A risk profile is a quantified analysis of the types of threats an organization, asset, project, or individual faces, focusing primarily on the risk exposure level.