Which strategy involves distributing risk across multiple entities?

The strategy that involves distributing risk across multiple entities is known as "Spread out." This approach recognizes that by diversifying where and how risks are held or mitigated, an individual or organization can reduce the overall impact of a potential loss.

In practical terms, spreading out risk can take many forms, such as holding a diverse portfolio of investments, partnering with different contractors for a project, or utilizing multiple insurance providers. This technique minimizes the likelihood that one event will adversely affect the entire enterprise, thereby enhancing overall stability.

Other strategies mentioned focus on different aspects of risk management. For instance, transferring risk typically involves shifting the risk to another party, such as through insurance policies or contracts. Avoiding risk means taking actions to prevent the risk from occurring altogether. Accepting risk is a strategy where the risk is acknowledged but not actively mitigated, with the understanding that certain risks may not be avoidable or transferable.