Risk assumption is the best risk management choice when the chance of loss is ___________ and the potential severity of loss is _______________.
A)high, low
B)low, high
C)low, low
D)high, high

Question

Quizplus · Accepted Answer

Risk assumption is the best choice when the chance of loss is low and the potential severity of loss is also low. This means that the cost of implementing risk management strategies (such as insurance, risk transfer, or risk avoidance) would be higher than the expected cost of any potential loss. Therefore, it is more financially prudent to assume the risk and simply accept the potential loss if it occurs.

Risk Assumption Is the Best Risk Management Choice When the Chance