What Should You Do If the Severity of a Risk

question 6

Multiple Choice

What should you do if the severity of a risk is low and the frequency of the risk event occurring is high?

• A) Avoid if possible.
• B) Manage the risk.
• C) Purchase insurance.
• D) Accept the risk.

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Definitions:

Private Sector

The part of the economy that is run by individuals and companies for profit and is not state controlled.

Resource Suppliers

Entities or individuals that provide the necessary inputs (like labor, raw materials, and capital) for the production of goods and services.

Income Tax

A tax levied by governments on individuals or entities based on their income or profits.

Value Added

At each stage of production, the selling price of a product minus the cost of intermediate goods purchased from other firms.