Answer:
Hi your question lacks some information which makes it incomplete. here is the complete question :
An entrepreneur keeps backup funds in a savings account so that if their business experiences a loss, they will be able to recuperate. What type of risk management is this an example of?
the type of risk management is called Reducing risk/risk reduction
Explanation:
Risk management is the identification, prioritizing and evaluation of risks involved in a business proposition or life projects. and this is done by using coordinated methodologies to minimize,control and if possible eliminate the potential risks identified and evaluated earlier.
Risk management is divided in two broad branches which are :
- risk reduction : this is an example of risk management whereby alternative means are provided to help cushion the effect of a risk /loss been exposed to
- risk avoidance : this is the complete elimination of risk i.e not exposing oneself or business to any potential risk
It is always impossible to completely avoid risk in life because every business/project comes with its own risk factors. therefore as a business man/entrepreneur risk reduction is the safest way to manage risk in business .
