Which of the following is NOT one of the three ways to manage risk?

The choice of “eliminate the risk” as the option not recognized as one of the primary strategies for managing risk is accurate because effective risk management typically encompasses three core options: avoid, control, and share.

Avoiding risk involves strategies to eliminate the potential for negative outcomes entirely by foregoing the activities that could lead to risks. For instance, a company might decide not to enter a market that poses significant regulatory challenges, thereby avoiding the potential risks associated with that market.

Controlling risk refers to measures taken to reduce the impact or likelihood of a risk event occurring. This could involve implementing robust internal controls, conducting regular audits, or adhering to compliance obligations to mitigate financial exposure.

Sharing risk encompasses strategies where the burden of risk is distributed among other parties, such as through insurance or outsourcing certain functions. By doing so, an organization reduces the potential impact on its own resources.

Eliminating risk, while it may seem desirable, is often impractical or impossible in many real-world scenarios. Most risks can only be mitigated or addressed through other methods, rather than entirely removed. Acknowledging this is key in effective risk management.