CompTIA Security+ (SY0-501) — Question 563

During a risk assessment, results show that a fire in one of the company's datacenters could cost up to $20 million in equipment damages and lost revenue. As a result, the company insures the datacenter for up to $20 million damages for the cost of $30,000 a year. Which of the following risk response techniques has the company chosen?

Answer options

• A. Transference
• B. Avoidance
• C. Mitigation
• D. Acceptance

Correct answer: A

Explanation

The company has opted for transference by purchasing insurance to cover potential losses from a fire, effectively shifting the financial risk to the insurance provider. Avoidance would involve eliminating the risk entirely, while mitigation would focus on reducing the impact or likelihood of the risk. Acceptance means acknowledging the risk without taking any action to address it, which is not the case here.