A race director is planning a marathon with US$80,000 in upfront costs that will be offset by race fees. The remainder of the funds will be donated to a national charity. State law mandates that all money paid by the participants must be refunded if the race is cancelled for any reason.

A race director is planning a marathon with US$80,000 in upfront costs that will be offset by race fees. The remainder of the funds will be donated to a national charity. State law mandates that all money paid by the participants must be refunded if the race is cancelled for any reason.
Which of the following is the best example of a risk mitigation response?
A. Let the runners know the race will be cancelled only in the event of an emergency.
B. Purchase an insurance policy covering up to US$85,000 in losses, at a cost of US$5,000, in the event the race is cancelled.
C. Inform the charity that they will receive no funds should the race be cancelled.
D. Charge the runners an additional amount to cover the US$80,000.

Download Printable PDF. VALID exam to help you PASS.