an entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they…

an entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. what type of risk management is this an example of?\nreducing risk.\nsharing risk.\navoiding risk.\nmaximizing risk.

an entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. what type of risk management is this an example of?\nreducing risk.\nsharing risk.\navoiding risk.\nmaximizing risk.

Answer

Brief Explanations:

By keeping backup funds, the entrepreneur is preparing to deal with potential losses, which lessens the impact of risk. Reducing risk involves taking steps to lower the negative consequences of potential risks. Sharing risk involves distributing it with others (e.g., through insurance), avoiding risk means not engaging in activities that pose risk, and maximizing risk is counter - intuitive as the goal is usually to manage risk.

Answer:

reducing risk.