Harry is the project manager of HDW project. He has identified a risk that could injure project team
members. He does not want to accept any risk where someone could become injured on this
project so he hires a professional vendor to complete this portion of the project work. What type of
risk response is Harry implementing?

A.
Transference

B.
Mitigation

C.
Acceptance

D.
Avoidance

Explanation:

Risk transfer means that impact of risk is reduced by transferring or otherwise sharing a portion of
the risk with an external organization or another internal entity. Transfer of risk can occur in many
forms but is most effective when dealing with financial risks. Insurance is one form of risk transfer.
Hence when Harry hires a professional vendor to manage that risk, the risk event does not go
away but the responsibility for the event is transferred to the vendor.
Answer D is incorrect. Avoidance removes the risk event entirely either by adding additional steps
to avoid the event or reducing the project scope.
Answer C is incorrect. Mitigation are actions that Harry’s project team could take to reduce the
probability and/or impact of a risk event.
Answer B is incorrect. Risk acceptance means that no action is taken relative to a particular risk;
loss is accepted if it occurs. Here
Harry is not accepting this risk event; he does not want anyone of his team to become injured so
he’s transferring the event to professional vendor.