Enterprise Risk Management $($ERM$)$ involves identifying and addressing business opportunities and risks to create value. ERM utilizes four main risk response strategies:

Avoidance: This strategy involves eliminating the risk by not engaging in the activity that gives rise to the risk. For example, a company may choose to avoid entering a high$-$risk market to eliminate the associated risks.

Mitigation: Mitigation aims to reduce the probability or impact of a risk. An example is implementing security measures to reduce the risk of cyber attacks.

Transfer: This strategy involves shifting the risk to another party, such as through insurance or outsourcing. For instance, a company may transfer the risk of a natural disaster by purchasing appropriate insurance coverage.

Acceptanceact without active treatment. This strategy is suitable for risks with low impact or probability