MANAGEMENT

Detailed explanation-1: -Risk transfer, or risk sharing, occurs when organizations shift the risk to a third party. A typical example of this occurs in the domain of financial loss. The vulnerable organization can transfer its risk of financial loss to an insurance company for a small premium.

Detailed explanation-2: -Spreading: It is possible to spread the risk of loss to property and persons. Duplication of records and documents and then storing the duplicate copies in a different location is an example of spreading risk. A small fire in a single room can destroy the entire records of a department’s operations.

Detailed explanation-3: -Risk Types: The different types of risks are categorized in several different ways. Risks are classified into some categories, including market risk, credit risk, operational risk, strategic risk, liquidity risk, and event risk. Financial risk is one of the high-priority risk types for every business.