PK0-005 Tools and Documentation Practice Question
A project manager is reviewing the risk register and notices a risk with a probability of 0.4 and an impact of $80,000. The project manager decides to purchase insurance to cover the potential loss. Which risk response strategy is being applied?
⚠ Common exam trap
Watch out — candidates often confuse transfer with mitigation, as both involve taking action, but transfer shifts the impact to another party while mitigation reduces the probability or impact.
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
Transfer is the correct risk response strategy because purchasing insurance shifts the financial consequences of the risk to a third party. The project manager retains the risk's probability but protects the project budget from the full impact. This is a common approach for risks with high financial impact, such as liability or property damage.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Transfer
Why this is correct
Transferring risk involves shifting the financial impact of a risk to a third party, often through insurance, warranties, or contracts. By purchasing insurance, the project manager transfers the potential $80,000 loss to the insurer in exchange for a premium. This strategy is appropriate when the risk is significant but cannot be easily avoided or mitigated.
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Avoid
Why it's wrong here
Avoidance involves changing the project plan to eliminate the risk entirely, such as removing the risky activity or adopting a different approach. Purchasing insurance does not eliminate the risk; it transfers the financial impact. Therefore, avoidance is not the correct strategy because the risk still exists and could occur.
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Accept
Why it's wrong here
Acceptance means acknowledging the risk and taking no action until it occurs, or creating a contingency plan. Purchasing insurance is an active response that involves a cost and a contractual agreement, so it goes beyond mere acceptance. Therefore, acceptance is not the appropriate strategy here.
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Mitigate
Why it's wrong here
Mitigation reduces the probability or impact of a risk through proactive actions, such as additional testing or redundancy. Purchasing insurance does not reduce the likelihood or impact of the risk event; it only compensates for financial loss afterward. Thus, mitigation is not the correct strategy in this scenario.
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This PK0-005 question is part of Courseiva's 954-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
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 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.