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 wants to keep operating even if a supplier-related loss occurs, so it purchases cyber insurance to offset possible costs. Which risk treatment is being used?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Transfer, because some financial impact is shifted to another party
Purchasing cyber insurance transfers the financial risk of a supplier-related loss to the insurance company. This is a classic risk transfer strategy, where the business does not eliminate or reduce the likelihood of the loss but shifts the financial impact to another party via a contractual agreement.
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.
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Avoidance, because the company is eliminating the supplier relationship
Why it's wrong here
Avoidance would mean stopping the activity entirely, which is not happening here.
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Mitigation, because insurance removes the risk before it happens
Why it's wrong here
Insurance does not prevent the incident itself; it mainly helps with financial impact after an event.
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Acceptance, because the company is doing nothing about the exposure
Why it's wrong here
The company is taking an action to reduce financial loss, so this is not simple acceptance.
✓
Transfer, because some financial impact is shifted to another party
Why this is correct
Risk transfer is the correct answer because insurance moves some of the financial burden to the insurer while the company continues the activity.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is confusing risk transfer (shifting financial impact) with risk mitigation (reducing likelihood or impact), leading candidates to incorrectly select mitigation when insurance is involved.
Detailed technical explanation
How to think about this question
Risk transfer in cybersecurity often involves contractual mechanisms like insurance policies, service-level agreements (SLAs), or indemnification clauses. Under the NIST SP 800-30 risk management framework, transfer is a distinct treatment option that does not reduce inherent risk but shifts residual financial liability. In practice, cyber insurance policies may require specific security controls (e.g., MFA, endpoint detection) as a condition of coverage, creating a feedback loop between risk transfer and risk mitigation.
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: Transfer, because some financial impact is shifted to another party — Purchasing cyber insurance transfers the financial risk of a supplier-related loss to the insurance company. This is a classic risk transfer strategy, where the business does not eliminate or reduce the likelihood of the loss but shifts the financial impact to another party via a contractual agreement.
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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