Explain the difference between risk assessment and selecting a risk-management option, and define the three risk-management options: risk acceptance, risk avoidance, and risk transfer.

### The concept Risk assessment and risk response are related but different parts of dealing with uncertainty. **Risk assessment** means examining an exposure so that a decision-maker can understand it; the supplied material mentions the topic, although its detailed text is unreadable. A **risk-management option** is a choice about what to do. Acceptance retains the exposure, avoidance removes the activity that creates it, and transfer assigns some agreed consequences to another party. A strong written answer should define assessment, name all three options, and distinguish their functions without inventing a procedure or formula absent from the source. ### What a good answer covers - Define risk assessment as examining an exposure. - State that an option is a response decision, not the assessment itself. - Explain that acceptance retains the exposure. - Explain that avoidance removes its source activity and transfer shifts agreed consequences. ### Terms - **Exposure**: A situation or activity that could lead to a loss. - **Risk transfer**: Shifting some agreed consequences to another party. ### Remember Assess the exposure first as a question of understanding; then identify the response choice.