risk elimination

The complete removal of a *risk. Unlike *risk avoidance, risk elimination does not necessarily imply nonengagement in (or disengagement from) an activity or *market. Risk elimination techniques can be costly. For example, an organization can eliminate its foreign exchange rate risk by the full *hedging of foreign currency liabilities, but it can find itself locked into Contractual exchange rates that turn out to be unfavorable at transaction *settlement dates. Further, many risks can never be entirely eliminated. The risk of theft in a warehouse can be reduced to acceptable levels, for example, but it can almost never be eradicated. See *risk minimization.

Auditor's dictionary. 2014.

Look at other dictionaries:

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