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Exam CNX-001 topic 1 question 10 discussion

Actual exam question from CompTIA's CNX-001
Question #: 10
Topic #: 1
[All CNX-001 Questions]

A company is expanding operations and opening a new facility. The executive leadership team decides to purchase an insurance policy that will cover the cost of rebuilding the facility in case of a natural disaster. Which of the following describes the team's decision?

  • A. Business continuity
  • B. Disaster recovery
  • C. Risk transference
  • D. Memorandum of understanding
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Suggested Answer: C 🗳️
by SuntzuLegacy at May 19, 2025, 2:10 a.m.

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SuntzuLegacy
1 month, 1 week ago
Selected Answer: C
Answer: C. Risk transference By purchasing an insurance policy to cover rebuilding costs, the company is transferring the financial risk of a potential disaster to the insurer. This effectively shifts the burden of loss from the company to the insurance provider, hence it is an example of risk transference.
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