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Chapter 2

7.3 TARA

 Transfer Transfer risk wholly or in part to a third party – e.g. insurance.

 Avoid Many risks are unavoidable, so the only choice here may be
not to invest.

 Reduce Reduce or mitigate risks by limiting probability and /or impact,
especially of downside exposure.

 Accept Accept the risk and deal with the consequences.

Impact/consequence

Low High

High REDUCE AVOID

Probability
/likelihood

Low
ACCEPT TRANSFER/SHARE

Illustrations and further practice

Now try TYU 9, 11 and 14 from Chapter 2

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