Which project risk response shifts the impact to a third party, for example by taking out insurance against the losses if the risk occurs, or by having a specialist company take on the work under a contract?

Answer: B. Transfer

Responses to negative risks (threats) are avoid, transfer, mitigate and accept. Transfer shifts the impact of a risk and the responsibility for dealing with it to a third party through insurance or contracts; the risk itself does not disappear. Avoid removes the cause of the risk by changing the plan (for example, by not using a new technology), and mitigate reduces the probability or impact. Accept means taking the risk without special measures, sometimes with a contingency reserve set aside in case it occurs.

• A. This response removes the cause of the risk itself by changing the plan.
• B. Correct. The impact is shifted to a third party through insurance or contracts.
• C. This response takes the risk without special measures; it does not shift the impact to anyone else.