Which term refers to actions to lower the probability or impact of a loss, such as preventive measures?

Which term refers to actions to lower the probability or impact of a loss, such as preventive measures?

• A. Avoidance
• B. Reduction
• C. Transfer risk
• D. Definite and measurable

Answer: (B)

The concept tested is risk reduction—taking actions to lower either the chance of a loss or how severe a loss would be through preventive measures. Installing safety devices, enforcing procedures, and training people are examples that actively cut exposure to loss. Avoidance means eliminating the activity to remove the risk entirely, transferring risk shifts the financial burden to another party (like buying insurance), and the phrase “definite and measurable” describes a criterion rather than a risk-control approach. So, reduction is the term that best fits the description.

The concept tested is risk reduction—taking actions to lower either the chance of a loss or how severe a loss would be through preventive measures. Installing safety devices, enforcing procedures, and training people are examples that actively cut exposure to loss. Avoidance means eliminating the activity to remove the risk entirely, transferring risk shifts the financial burden to another party (like buying insurance), and the phrase “definite and measurable” describes a criterion rather than a risk-control approach. So, reduction is the term that best fits the description.