Direction: It consists of two statements, one labeled as ‘Statement (I)’ and the others as ‘Statement (II)’. You are to examine these two statements carefully and select the answer using the codes given below:

Statement (I): Acceptance is active when a risk is identified as being acceptable but we decide to establish a contingency reserve.

Statement (ll): The contingency reserve is in the form of physical help that the employees of a company do to handle threat and oppurtunities.

Explanation:

Acceptance:

Acceptance of risk means that the severity of the risk is low enough that we will do nothing about the risk unless it occurs:

Many of the project risks will fall into this category.

(1) Active acceptance: Acceptance is active when a risk is identified as being acceptable but we decide to establish a contingency reserve (in the form of time, money, or resources) or to make a plan for handling threats or opportunities. 

This approach is also called a Contingency plan.

(2) Passive acceptance: Acceptance is passive when nothing is to be done to plan for the risk occurrence and the project team is being told to deal with these threats or opportunities as they occur. This approach is also called a Workaround.

Statement II is incorrect as in contingency reserve, help is done in the form of time, money, and resources.