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difference between accepting a risk and self-funding a risk

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asked May 13 in BUS 1003H - Introduction to Financial Risk by anonymous
In the various types of risk management "accepting a risk" and "self-funding a risk" are distinct management methods.
What is the difference between these two types of management methods?

1 Answer

+1 vote
answered May 14 by Tae (280 points)
"Accepting a risk" means you will to face the consequences of risk and the consequences can be physical, financial, emotional (also not necessarily always negative).
"Self-funding a risk" means you accept and will be resposible for the full financial burden of risk.

So the difference would be "accepting a risk" refers to any consequences and "self-funding a risk" refers to financial consequences (i.e. costs/expenses) you have accepted and have to pay for.