The answer is risk transfer. This is correct because purchasing cyber insurance shifts the financial burden of a potential data center outage to a third-party insurer, while the documented remaining exposure acknowledges that not all risk can be transferred—this is the essence of risk transfer vs acceptance vs mitigation vs avoidance. On the Security+ SY0-701 exam, this scenario tests your ability to distinguish between risk treatment strategies, with a common trap being confusion between transfer and mitigation; remember that mitigation involves reducing likelihood or impact through technical controls, not just paying someone else to cover the loss. A useful memory tip is to think of “transfer” as handing the bill to another party, while “acceptance” means you keep the risk and simply document it.
SY0-701 Security Program Management and Oversight Practice Question
This SY0-701 practice question tests your understanding of security program management and oversight. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A business unit is worried about the financial impact of a rare but severe data center outage. After reviewing the risk register, leadership decides to purchase cyber insurance and document the remaining exposure rather than redesign the entire platform. Which risk treatment is this?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Risk transfer
The correct answer is A (Risk transfer) because purchasing cyber insurance transfers the financial risk of a data center outage to an insurance provider. The business unit is not avoiding the risk by redesigning the platform, nor are they mitigating it through technical controls; they are simply documenting the residual exposure after transferring the monetary impact. This aligns with the risk treatment strategy of shifting the burden of loss to a third party.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Risk transfer
Why this is correct
Risk transfer shifts some financial impact to a third party, such as through insurance or a contractual liability arrangement.
Related concept
Read the scenario before looking for a memorised answer.
✗
Risk avoidance
Why it's wrong here
Risk avoidance would mean eliminating the activity or system entirely, which is not happening in this case.
✗
Risk mitigation
Why it's wrong here
Risk mitigation reduces the likelihood or impact with controls, but purchasing insurance mainly shifts financial exposure.
✗
Risk acceptance
Why it's wrong here
Risk acceptance means acknowledging the risk without moving it elsewhere, which is not the decision described here.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse risk transfer (shifting financial liability) with risk mitigation (reducing probability/impact via technical controls), especially when the scenario mentions 'documenting the remaining exposure'—which is a hallmark of risk acceptance, not mitigation.
Detailed technical explanation
How to think about this question
Risk transfer in IT governance often involves contractual mechanisms like cyber insurance policies that specify coverage limits, deductibles, and exclusions (e.g., for acts of war or negligence). Under the hood, the residual risk remains on the risk register as an accepted exposure, with the insurance payout acting as a financial buffer rather than a technical safeguard. In real-world scenarios, organizations may combine transfer with mitigation—for example, using RAID 6 for data redundancy while insuring against catastrophic physical destruction.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A security analyst at a medium-sized enterprise encounters this scenario during an investigation or architecture review. The correct answer reflects best practice for the specific threat or control described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Security exam questions test whether you can match controls to threats in context — not just recall definitions.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this SY0-701 question in full detail.
Security Program Management and Oversight — This question tests Security Program Management and Oversight — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Risk transfer — The correct answer is A (Risk transfer) because purchasing cyber insurance transfers the financial risk of a data center outage to an insurance provider. The business unit is not avoiding the risk by redesigning the platform, nor are they mitigating it through technical controls; they are simply documenting the residual exposure after transferring the monetary impact. This aligns with the risk treatment strategy of shifting the burden of loss to a third party.
What should I do if I get this SY0-701 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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