Identify the missing word in the following sentence.
The risk response type [ ? ] can be used to respond to a threat and an opportunity.
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A. B. C. D.C.
The missing word in the sentence is the risk response type that can be used to respond to both threats and opportunities.
Each of the risk response types has a specific purpose and is used to address different risks in a project. The four risk response types are:
Avoid: This risk response type aims to eliminate the risk altogether. It is used when the risk is too high or when the cost of addressing the risk outweighs the benefits. Avoiding the risk means taking steps to ensure that it does not occur or removing the cause of the risk.
Reduce: This risk response type aims to reduce the likelihood or impact of the risk. It is used when the risk cannot be avoided and needs to be managed. Reducing the risk can be achieved through risk mitigation strategies that aim to minimize the probability or impact of the risk.
Share: This risk response type involves sharing the risk with another party. It is used when the risk cannot be avoided or reduced, and the project team is unwilling or unable to accept the risk. Sharing the risk means transferring some or all of the risk to another party, such as an insurance company or a subcontractor.
Transfer: This risk response type involves transferring the risk to another party. It is used when the risk cannot be avoided or reduced, and the project team is unwilling or unable to accept the risk. Transferring the risk means transferring the responsibility for managing the risk to another party, such as a vendor or a customer.
Based on the above descriptions, the missing word in the sentence is "D. Transfer" since it is the only risk response type that can be used to respond to both threats and opportunities. When a risk response type is used to respond to opportunities, it is often referred to as "exploiting" the opportunity rather than "managing" the risk. Exploiting an opportunity involves taking steps to maximize the probability and impact of the opportunity.