CRISC Risk Response and Mitigation Practice Question
A global company uses a critical third-party vendor for data processing. The inherent risk is high, but the vendor has implemented robust controls. However, due to recent geopolitical instability, the vendor's physical location is at risk. The risk owner recommends purchasing a business continuity insurance policy. Which risk response is being applied?
⚠ Common exam trap
CRISC often tests the difference between transfer and mitigate, so candidates may pick mitigate because controls are mentioned, but the specific action of buying insurance is transfer.
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 a business continuity insurance policy transfers the financial impact of the risk to a third party (the insurer), which is the definition of the transfer response. The vendor's robust controls address some risk, but the geopolitical risk remains and is being shifted via insurance. This is a classic example of risk transfer through insurance.
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
Purchasing insurance shifts the financial consequence of a disruption to an insurer, which is the defining characteristic of risk transfer. The vendor's location risk remains, but its monetary impact moves elsewhere, satisfying the stem's description of the risk owner's chosen response.
- ✗
Avoid
Why it's wrong here
Avoidance eliminates the activity generating the risk, such as terminating the vendor relationship or moving processing in-house; insurance keeps the exposure intact. It is tempting because geopolitical instability sounds intolerable, and avoidance would be correct if the company exited the region or discontinued the outsourced processing entirely.
- ✗
Accept
Why it's wrong here
Accepting retains the risk without transferring its financial impact; insurance transfers the loss to the insurer. It is tempting because the vendor's robust controls may suggest residual risk is tolerable, and acceptance would be correct if the company simply acknowledged the geopolitical exposure and set aside no compensating mechanism.
- ✗
Mitigate
Why it's wrong here
Insurance transfers the financial consequence of an outage to a third party; it does not reduce the likelihood or impact of the geopolitical event itself, so the response is transfer, not mitigate. Mitigation would be correct had the vendor relocated data processing or added redundant sites, which are the controls that actually lower inherent risk.
Go deeper
Related to this question
About these practice questions
Courseiva writes every CRISC question from scratch — 1,062 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or 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 ISACA exam blueprint
This CRISC practice question is part of Courseiva's free ISACA 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 CRISC exam.