Exam PK0-004 topic 1 question 109 discussion

Shouldn’t this be transfer?

Warranty would imply mitigation or the preparation of reducing the impact of a problem, so C. Mitigate is correct.

Transfer In Risk Transfer approach, the risk is shifted to a third party. The third-party, like insurance company or vendor, is paid to accept or handle the risk on your behalf and hence the ownership, as well as impact of the risk, is borne by that third party. This payment is called a risk premium. Contracts are signed to transfer the liability of risks to the third party. Risk Transfer does not eliminate the risk, but it reduces the direct impact of the risk on the project. Few Transference tools are an insurance policy, performance bonds, warranties, guarantees, etc. This approach is most effective in covering financial risk exposure.

Is warranty a risk transfer? These questions are just a way to express the real question: is reps and warranties insurance merely a “deal facilitation tool” or a genuine risk transfer mechanism? The answer is yes, it's genuine risk transfer. Like with other types of insurance, claims are made and paid. Answer is transfer

Risk mitigation is a strategy to prepare for and lessen the effects of threats faced by a business. Comparable to risk reduction, risk mitigation takes steps to reduce the negative effects of threats and disasters on business continuity

Risk mitigation actions may be costly and time consuming; actions taken are balanced against priority level of the risk. Organizations typically transfer risk where possible, for example through product warranty.

The reference site listed doesn't even have the word "warranty" on the page anywhere. I think warranty is like insurance, which is transfer. This is taken from Heldman: "Transfer: Moving the liability for the risk to a third party by purchasing insurance, performance bonds, and so on."

A warranty is a form of insurance, which is a risk transfer. When purchasing a laptop from Dell for example, you can purchase a 5-year warranty so in the event a part fails you can have the vendor replace it. Don't get lost in the sauce, Comptia does that.

mitigation is the safe bet here because you don't know what the warranty entails. It may have an absolute transfer of risk, i.e. the keyboard bottoms up and you get an entire new computer system. On the flip side the warranty may only cover things like the RAM, Mother board and other components. In this case it would be almost a shared risk since there are a few items you'd have to pay for and some the other company would. Non the less its mitigation even if it covering 1% risk to 99%.

I don't understand what risk would be mitigated through warranty? If something were to happen to a computer, it is going to happen regardless of warranty or no warranty. I feel like it should be transfer, as you're just making the issue someone else's problem with warranty.

If it was insurance for the devices, then it would indeed be Transference, but since it's purchased and included with the devices as a precautionary measure, I would lean on Mitigation.