CAPM Predictive Plan-Based Methodologies Practice Question
A project manager is planning risk responses for a high-impact, low-probability risk. The team decides to purchase an insurance policy to cover potential losses. Which risk response strategy is being used?
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
Risk transfer involves shifting the impact to a third party, like insurance. Option A is wrong because risk avoidance changes the plan to eliminate the risk. Option C is wrong because risk mitigation reduces probability or impact. Option D is wrong because risk acceptance acknowledges the risk without action.
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 change the plan to eliminate the risk entirely, not transfer it.
- ✓
Transfer
Why this is correct
Insurance transfers the financial risk of a loss to the insurance company.
- ✗
Acceptance
Why it's wrong here
Acceptance would involve acknowledging the risk and budgeting for it, not transferring.
- ✗
Mitigation
Why it's wrong here
Mitigation would reduce the probability or impact, not transfer it.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This CAPM practice question is part of Courseiva's free PMI 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 CAPM exam.