What Are the Two Primary Components of Risk and Four Strategies to Handle Risk for a Given Event? Briefly Describe How the Four Strategies Applied in the Two Components as a Tool to Control the Risk Event?

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Risk has two primary components for a given event:
Likelihood is the probability of occurrence that event
Impact of the event occurring (amount at stake).

Four strategies to handle risk for a given event:
1.Avoidance
This is a response type where you attempt to overcome the risk event by trying to stray away from or eliminate it altogether. You do something to your plan, so that the risk simply won’t occur. It involves a change in the concept, requirements, specifications, and/or practices to reduce risk to an acceptable level. It eliminates the sources of high or possibly medium risk and replaces them with a lower risk solution. This method may be used in parallel with the up-front requirements analysis, supported by cost/requirement trade-off studies. It may also be used later in the development phase when test results indicate that some requirements cannot be met, and the potential cost and/or schedule impact would be severe.

2.Transference
The response type where you transfer the responsibility for the risk to someone else. In project management, insurance is one response using transference, but you might also transfer the risk by hiring a vendor who is more adept at the particular work itself. Transference does not necessarily eliminate the risk – and in fact, the company who takes on the risk should be insured itself, otherwise, your project could still suffer great consequences if the risk occurs. Risk transfer may reallocate risk from one part of the system to another, thereby reducing the overall system and/or lower-level risk. It is a form of risk sharing and not risk abrogation on the part of the buyer or seller, and it may influences cost objectives.

3.Mitigation/Control
Risk control does not attempt to eliminate the source of the risk but seeks to reduce or mitigate the risk. It manages the risk in a manner that reduces the likelihood and/or consequence of its occurrence on the program. This option...
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