Question

What is risk retention?
Responses

A strategy whose goal is to eliminate the risk of loss by stopping the action or behavior that leads to it.
A strategy whose goal is to eliminate the risk of loss by stopping the action or behavior that leads to it.

A strategy that reduces risk by minimizing the chance that the loss occurs, or reduces the value lost.
A strategy that reduces risk by minimizing the chance that the loss occurs, or reduces the value lost.

A strategy where the risk of loss is shared with another person, entity or group.
A strategy where the risk of loss is shared with another person, entity or group.

A strategy that accepts that the amount at risk is worth the risk taken or that the cost of risk mitigation is too high.

Answer 1

The correct response is the last one:

"A strategy that accepts that the amount at risk is worth the risk taken or that the cost of risk mitigation is too high."

(Also called risk retention or risk acceptance — you simply absorb the loss yourself rather than avoid, reduce, or transfer it.)