Question

A risk manager says: "I recognize the theoretical possibility of an asteroid falling on one of our plants, but there is absolutely nothing we can do about it. So this does not affect our managerial and financial decision making." Such a perspective is an example of:
a. Unplanned, unfunded retention
b. Unplanned, funded retention
c. Planned, unfunded retention
d. Avoidance Planned, funded retention

Answer 1

Answer:

C

Explanation:

This case is en example of Planned, unfunded retention because here the outcome is already known but nothing can be done about it. So this does not affect our managerial and financial decision making.

Unfunded retention is type of retention plan under which losses are paid out of cash flow or out of funds obtained by borrowing