CAS Practice Exam 2025 – Complete Study Guide

The term "treat risks" in the risk management process specifically refers to the implementation of strategies designed to mitigate identified risks. This phase involves taking action to reduce the likelihood or impact of potential negative events that could affect an organization or project. The goal of risk treatment is to ensure that risks are managed in a way that aligns with the organization's risk appetite and acceptance levels.

Effective risk treatment may include a range of strategies such as avoiding the risk altogether, transferring the risk to another party (such as through insurance), reducing the risk by implementing controls or safety measures, or accepting the risk when the costs of treatment exceed the potential impact. This process is essential for maintaining control over risks and ensuring that they do not hinder organizational objectives.

The other options relate to different aspects of the risk management process but do not specifically capture the essence of treating risks. Identifying new risks is about recognizing potential hazards, evaluating risk performance focuses on reviewing how risks are managed, and studying risk theory relates to academic and theoretical understanding of risks rather than the practical application of managing them.