An entertainment company is considering adopting a strategy of partnering with major action-adventure game companies to prosuce major theatrical and straight-to-DVD movies based on their games. The company has determined that it will be subjected to significant losses if it falls to accurately predict the popularity of the games that it chooses for its movies.

Presented below are eight risk responses that thr entertainment company may choose to use relative to the risk of losses. Categorize each response as one of the following options:

. Risk Avoidance Risk Acceptance Risk Sharing Risk Reduction (2 points each = 16 points) Risk Response Type a. unsuccessful movies exceeds its corporate risk appetite and abandons Avordance its strategy of producing movies based on action-adventure games. R.SK b. The entertainment company purchases insurance policies from Lloyds of London to recover 75% losses exceeding $10,000,000 on any movie property. c. The entertainment company requires in marketing staff to perform extensive market research prior to entering into a movie production contract for a specific game. d. The entertainment company enters into a blanket contract with a streaming service to cover 60% of the unrecovered costs of a movie after six months of release in exchange for exclusive rights to the movie property thereafter. e. The entertainment company signs contracts with the game companies in which the companies agree that they will split any losses from a movie production on a 50-50 basis. | Risk inevitable and accepts such losses as part of their standard business Acceptance f. model. g. The entertainment company requires its Project Development staff to prepare a report that includes a detailed cost analysis and revenue projections for each proposed film project. The Chief Executive Officer and Chief Financial Officer must sign off on the report to approve the project before it may proceed