CAS-004 Governance, Risk, and Compliance Practice Question
A security analyst is reviewing the organization's risk register and notices a risk that has been assigned a risk score of 15 on a scale of 1 to 25. The risk owner has decided to purchase cyber insurance to transfer the financial impact of the risk. Which risk treatment strategy is being applied?
⚠ Common exam trap
Watch out — candidates often confuse risk transfer with risk mitigation, as both involve taking action, but transfer shifts financial impact while mitigation reduces the risk itself.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Risk transfer
Purchasing cyber insurance shifts the financial consequences of a risk to an insurer, which is the definition of risk transfer. Risk avoidance would eliminate the activity, mitigation would reduce likelihood or impact, and acceptance would involve bearing the risk without transfer. The scenario clearly describes transfer.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Risk acceptance
Why it's wrong here
Risk acceptance means acknowledging the risk and deciding to bear the potential loss without taking action to transfer or mitigate it. In this scenario, the organization is taking action by purchasing insurance, which transfers the financial impact. Thus, it is not pure acceptance, although some residual risk may remain.
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Risk mitigation
Why it's wrong here
Risk mitigation involves implementing controls to reduce the likelihood or impact of a risk. Purchasing insurance does not reduce the likelihood of the risk occurring; it only compensates for financial loss after an event. Therefore, it is not a mitigation strategy, but rather a transfer strategy.
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Risk transfer
Why this is correct
Risk transfer involves shifting the financial impact of a risk to a third party, such as an insurance company. Purchasing cyber insurance is a classic example of risk transfer. The organization retains the risk but transfers the potential financial loss to the insurer, which aligns with the risk owner's decision in this scenario.
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Risk avoidance
Why it's wrong here
Risk avoidance means eliminating the risk by discontinuing the activity that causes it. In this scenario, the organization is not stopping the activity; it is purchasing insurance to transfer financial impact. Avoidance would involve ceasing the use of the vulnerable system or process entirely, which is not what is described.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official CompTIA exam blueprint
This CAS-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAS-005 exam.