The answer is transfer. This is correct because purchasing cyber insurance shifts the financial burden of a ransomware incident to an insurer, which is the defining action of risk transfer; the executives also formally acknowledge the remaining exposure, confirming they are not simply accepting the risk but actively moving the monetary impact through a contractual agreement. On the Security+ SY0-701 exam, this scenario tests your ability to distinguish between risk treatment strategies—transfer, accept, mitigate, and avoidance—where a common trap is confusing transfer with acceptance when residual risk is acknowledged. Remember that transfer always involves a third party assuming the financial loss, while acceptance means no action is taken beyond documenting the risk. A useful memory tip: if money changes hands to cover a loss, it’s transfer, not acceptance.
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 manufacturer identifies a rare but very costly ransomware risk. Executives decide not to eliminate the activity, but to purchase cyber insurance and formally acknowledge the remaining exposure. 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
The correct answer is B (Transfer) because purchasing cyber insurance shifts the financial risk of the ransomware incident to the insurer. The executives formally acknowledge the remaining exposure, which confirms they are not simply accepting the risk but are actively transferring the monetary impact through 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.
✗
Avoidance
Why it's wrong here
Avoidance would mean stopping the risky activity entirely, which the scenario does not describe.
✓
Transfer
Why this is correct
Transfer shifts some financial impact to another party, such as an insurer, while the organization keeps operating.
Related concept
Read the scenario before looking for a memorised answer.
✗
Mitigation
Why it's wrong here
Mitigation reduces likelihood or impact through controls, but insurance mainly shifts financial burden.
✗
Acceptance
Why it's wrong here
Acceptance means knowingly retaining the risk without transferring it to another party.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse 'acceptance' with 'acknowledgment' — the phrase 'formally acknowledge the remaining exposure' is a red herring; true acceptance requires no further action, but purchasing insurance proves the risk is being transferred, not accepted.
Trap categories for this question
Scenario analysis trap
Avoidance would mean stopping the risky activity entirely, which the scenario does not describe.
Detailed technical explanation
How to think about this question
Risk transfer via cyber insurance is a contractual mechanism where the insurer assumes defined financial liabilities (e.g., ransom payment, forensic investigation costs, business interruption losses) in exchange for premiums. The policy typically includes specific exclusions (e.g., nation-state attacks, failure to maintain security controls) that the organization must meet to avoid coverage denial. In practice, this is often paired with residual risk acceptance for uninsurable or self-insured retention amounts.
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 SOC analyst notices unusual lateral movement in the network at 2 AM. The IR playbook dictates: identify and contain (isolate the affected machine), then eradicate (remove the malware), then recover (restore from backup), then document. Skipping containment before eradication risks the attacker regaining access. Questions like this test the sequence and rationale of incident response phases.
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 — The correct answer is B (Transfer) because purchasing cyber insurance shifts the financial risk of the ransomware incident to the insurer. The executives formally acknowledge the remaining exposure, which confirms they are not simply accepting the risk but are actively transferring the monetary impact through 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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