hardMultiple ChoiceObjective-mapped
PK0-005 Practice Question: A project manager is conducting a risk assessment…
A project manager is conducting a risk assessment and identifies a risk with a high probability and high impact. The team decides to purchase insurance to cover potential losses. This is an example of which risk response strategy?
⚠ Common exam trap
Candidates often confuse Transfer with Mitigate, as candidates often think paying for insurance reduces the risk, but it only shifts the financial consequence, not the likelihood or inherent threat.
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
✓
Transfer
Purchasing insurance transfers the financial risk of a potential loss to a third party (the insurer). This is the defining characteristic of the Transfer risk response strategy, where the ownership and impact of the risk are shifted, but the risk itself is not eliminated. In project management, this is distinct from Mitigate, which reduces probability or impact through direct action.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Mitigate
Why it's wrong here
Mitigation would reduce the probability or impact, not transfer.
- ✓
Transfer
Why this is correct
Insurance transfers the financial consequence to the insurer.
- ✗
Accept
Why it's wrong here
Acceptance means acknowledging the risk without proactive transfer.
- ✗
Avoid
Why it's wrong here
Avoidance would change the project plan to eliminate the risk.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This PK0-005 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 PK0-005 exam.