DECA Sports and Entertainment Marketing Practice Exam

What is the process called that involves identifying and preparing to manage risks?

1. Risk analysis

2. Risk assessment

3. Risk mitigation

4. Risk elimination

The correct answer is: Risk assessment

The process of identifying and preparing to manage risks is known as risk assessment. This involves evaluating the potential risks that might affect a project or organization and determining their likelihood and potential impact. Through risk assessment, businesses are able to understand the risks they face and can prioritize which risks need to be managed. This is a critical step in the broader risk management process, as it lays the groundwork for developing strategies to address those risks effectively. Risk analysis, while related, typically focuses more on the qualitative and quantitative evaluation of risks rather than the initial identification and preparation stage. Risk mitigation refers to the steps taken specifically to reduce the likelihood or impact of identified risks, while risk elimination would involve strategies aimed at completely removing the risks, which is often not feasible. Thus, risk assessment is key to the overall management of risks within an organization, making it the most accurate answer to the question.