FRM Financial Risk Manager Practice Test

Accept, mitigate, transfer, and avoid are the four acceptable ways of dealing with risk. Remember that mitigating and reducing are synonyms in risk management and that insuring is a form of transferring risk.

Key Takeaway: We want you to remember these four options and consider them each time you contemplate what to do with a risk. Our natural tendency is to avoid or mitigate, but sometimes that is not possible.