The process of transferring risk to the capital markets through the use of financial instruments such as bonds,futures contracts,and options is known as

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Securitization of risk involves transferring risk to the capital markets through the use of financial instruments such as bonds, futures contracts, and options. This allows risk to be spread out among a wider group of investors, reducing the impact of any one individual or organization experiencing a significant loss. Consolidation of risk involves combining individual risks into a larger, collective risk while compartmentalization of risk involves separating risks into different categories or segments. Avoidance of risk involves taking steps to eliminate or reduce risk altogether.

The Process of Transferring Risk to the Capital Markets Through