Which of the following best describes risk transference?

Risk transference refers to the practice of shifting the responsibility of a risk to another party, allowing an organization to manage potential losses associated with that risk without having to directly bear all its consequences. This can be done through various means, such as purchasing insurance or outsourcing certain functions to third-party vendors who assume certain risks associated with their services.

Handling risk associated with an activity without accepting all the risks reflects the essence of risk transference, where the ownership of the risk is shifted rather than ignored or directly mitigated by the organization itself. This is a critical strategy for organizations, especially when certain risks can be more effectively managed or absorbed by other entities.

The other options represent different approaches to risk management, such as accepting all risks (which does not involve shifting responsibility), mitigating risks (which focuses on reducing the likelihood and impact of risks but does not transfer them), and eliminating risks entirely (often unrealistic in many scenarios), none of which accurately capture the definition of risk transference.