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
Answer
Brief Explanations:
The entrepreneur is setting aside funds to mitigate the impact of potential business losses. Reducing risk involves taking steps to lower the negative consequences of a risk event. Sharing risk involves spreading it with others (e.g., through insurance or partnerships). Avoiding risk means not engaging in activities that pose a risk. Maximizing risk is not a typical risk - management strategy as the goal is usually to minimize or manage risk. Here, the action of keeping backup funds is about reducing the impact of a loss, so it's reducing risk.
Answer:
reducing risk