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?

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?


a. reducing risk.

b. sharing risk.

c. avoiding risk.

d. maximizing risk.


Answer: a. reducing risk.

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