MLX Drug Company would like to market a new hypertension drug. While t

MLX Drug Company would like to market a new hypertension drug. While the Food and Drug Administration (FDA) was testing the drug, it discovered that the drug produced a harmful side effect.

When MLX learned of the FDA’s test result, MLX abandoned its plan to produce and distribute the drug. MLX’s reaction illustrates
A) risk avoidance.
B) hedging.
C) risk transfer.
D) risk retention.

ANSWER

Answer: A