Suppose a firm faces a risk that is both very high frequency…

Suppose a firm faces a risk that is both very high frequency and very high severity. Unfortunately, this risk is associated with an activity that is essential to its business operations, meaning the activity must be continued or the business simply will not be able to operate at all.  Which of the following risk management strategies should this firm utilize to manage this difficult loss exposure?

The Cool Corporation is a medium sized business that has an…

The Cool Corporation is a medium sized business that has an annual revenue of $25 million. The Cool Corporation faces a loss exposure = the probability of this loss exposure occurring is 0.001%. However, if the loss exposure does occur (although very unlikely) it will result in $25 million in damages. Which risk management option should the Risk Manager of The Cool Corporation choose for this loss exposure?