Opportunity Risk Response Types

C.

The appropriate risk response type to respond to an opportunity is to exploit it.

Risk response is a key element in the risk management process. Risk response is a plan that outlines the approach to manage a risk. There are four main types of risk responses, which are avoid, transfer, mitigate, and accept. However, when it comes to opportunities, there are two types of responses: exploit and enhance.

Exploit response is a risk response strategy that seeks to take advantage of the opportunity by ensuring that the organization benefits from it to the maximum extent possible. Exploiting an opportunity involves increasing the probability and impact of the opportunity. This is achieved by implementing actions that will help to optimize the opportunity.

Enhance response, on the other hand, is a risk response strategy that involves taking actions to increase the probability and impact of the opportunity. This approach is appropriate when the opportunity is already attractive but needs to be enhanced to achieve maximum benefits.

Fallback and Transfer are both risk response types used to respond to threats rather than opportunities.

Fallback response is a risk response strategy that is used to develop a contingency plan that can be used when a particular risk occurs. This response is used when the identified risk cannot be avoided, transferred, or mitigated.

Transfer response is a risk response strategy that involves transferring the risk to a third party. The third party may be an insurance company or a supplier, and the transfer is done through a contract or other means.

Accept response is a risk response strategy that involves accepting the risk and taking no action to mitigate it. This approach is used when the potential impact of the risk is low, or when the cost of mitigating the risk is greater than the impact of the risk.

In summary, when it comes to opportunities, the appropriate risk response type is to exploit it. This approach seeks to take advantage of the opportunity by ensuring that the organization benefits from it to the maximum extent possible.