CIMAPRO19-P02-1 Exam - Topic 4 Question 46 Discussion

Question

The management of a leisure company, who are risk averse, have just approved an investment in a new amusement park. The country in which the amusement park will be located has a warm and mostly dry climate throughout the year.

A number of specific risks related to this investment have been identified as follows.

(1) Losses of very small amounts of revenue due to poor weather.

(2) A significant financial liability may arise due to the injury of a member of the public.

(3) Loss of several days of revenue due to rides being unavailable because of poor maintenance routines.

(4) Income fraud as a consequence of the high levels of cash handled by employees.

Using the TARA framework, which is the most appropriate way of managing each of these risks?

Nu · Accepted Answer

C) Accept risk 1; transfer risk 2; avoid risk 3; reduce risk 4

Nu · Answer

A) Transfer risk 1; accept risk 2; avoid risk 3; reduce risk 4

Nu · Answer

B) Accept risk 1; avoid risk 2; transfer risk 3; reduce risk 4

Nu · Answer

D) Reduce risk 1; transfer risk 2; avoid risk 3; accept risk 4