CompTIA CASP+ Practice Test

In the context of risk management, what does transferring the risk mean?

1. Eliminating all forms of risk

2. Shifting the financial burden to another entity

3. Assessing the risk to determine its severity

4. Implementing security controls to mitigate risks

The correct answer is: Shifting the financial burden to another entity

Transferring the risk primarily involves shifting the financial burden associated with a potential loss or threat to another party. This can be achieved through various means, such as purchasing insurance, outsourcing a specific operation to a third party, or entering into contracts that make another entity responsible for certain risks. The key point is that while the risk itself is not eliminated, the financial responsibility for that risk is moved away from the entity facing the risk, allowing them to mitigate potential losses. In contrast, eliminating all forms of risk would imply a complete eradication of potential threats, which is often impractical and infeasible in a real-world context. Similarly, assessing the risk to determine its severity is an essential part of risk management but does not constitute transferring it; instead, it serves as the foundation for making informed decisions. Finally, implementing security controls to mitigate risks relates to reducing the likelihood or impact of these risks rather than transferring them, as it involves taking proactive measures to protect an organization from potential threats.