If the Chance of Loss Is High and Loss Severity

question 6

Multiple Choice

If the chance of loss is high and loss severity is high, generally the most appropriate risk management tool is:

• A) risk transfer
• B) risk reduction
• C) risk assumption
• D) risk avoidance

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Definitions:

Outsourcing

The practice of hiring third parties to perform services or produce goods that were traditionally performed or produced in-house.

Productivity Losses

The decline in the effectiveness or efficiency of a workforce, often leading to a decrease in output, revenue, or service quality.

Potential Outsourcing

The possibility of transferring certain job functions or services to external providers to increase efficiency or reduce costs.

HR Departments

Organizational units responsible for managing workforce-related issues such as recruitment, training, benefits, and compliance with labor laws.