You are working on a project in an enterprise. Some part of your project requires e-commerce, but
your enterprise choose not to engage in e-commerce. This scenario is demonstrating which of the
following form?

A.
risk avoidance

B.
risk treatment

C.
risk acceptance

D.
risk transfer

Explanation:

Each business process involves inherent risk. Not engaging in any activity avoids the inherent risk
associated with the activity. Hence this demonstrates risk avoidance.
Answer D is incorrect. Risk transfer/sharing means reducing either risk frequency or impact by
transferring or otherwise sharing a portion of the risk. Common techniques include insurance and
outsourcing. These techniques do not relieve an enterprise of a risk, but can involve the skills of
another party in managing the risk and reducing the financial consequence if an adverse event
occurs.
Answer B is incorrect. Risk treatment means that action is taken to reduce the frequency and
impact of a risk.
Answer C is incorrect. Acceptance means that no action is taken relative to a particular risk, and
loss is accepted when/if it occurs. This is different from being ignorant of risk; accepting risk
assumes that the risk is known, i.e., an informed decision has been made by management to
accept it as such.