Hello everyone! Here is this week's free PMP® exam sample question from the PM Exam Simulator.

A project manager decides to buy insurance in case of a fire. Which of the following risk response strategies is being used here?

A. Accepting consequences
B. Transfer of risk
C. Removing the risk
D. Reducing the risk

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HINT: This risk is being moved to the insurance company.

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Answer and Explanation:
The correct answer is B.

Insurance is an example of transferring the risk. The risk is not eliminated, it is just passed on to another party, for example, an insurance company.