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CompTIA CNX-001 Exam - Topic 2 Question 25 Discussion

A company is expanding operations and opening a new facility. The executive leadership team decides to purchase an insurance policy that will cover the cost of rebuilding the facility in case of a natural disaster. Which of the following describes the team's decision?
C) Risk transference
A) Business continuity
B) Disaster recovery
D) Memorandum of understanding

CompTIA CNX-001 Exam - Topic 2 Question 25 Discussion

Actual exam question for CompTIA's CNX-001 exam
Question #: 25
Topic #: 2
[All CNX-001 Questions]

A company is expanding operations and opening a new facility. The executive leadership team decides to purchase an insurance policy that will cover the cost of rebuilding the facility in case of a natural disaster. Which of the following describes the team's decision?

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Suggested Answer: C

By purchasing an insurance policy, the company shifts the financial burden of rebuilding after a natural disaster to the insurer, which is the essence of risk transference.


by Cecil at Sep 26, 2026, 09:55 PM

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