Transferring risk can be achieved through which of the following?

Transferring risk is a strategy that involves shifting the financial burden associated with certain risks to another party. This is effectively achieved through mechanisms such as insurance or outsourcing. When an organization purchases insurance, it pays a premium to transfer the risk of specific events—like property damage, liability claims, or business interruptions—to the insurance company. In the case of outsourcing, a company can transfer operational risk by delegating certain functions to another entity that specializes in that area, thereby reducing its own exposure to risk.

In contrast, increasing capital reserves, implementing stricter regulations, and reducing operational capacity are strategies that focus on managing or mitigating risk rather than transferring it. Increasing capital reserves may strengthen a company's ability to absorb losses but does not shift the risk away from the organization itself. Stricter regulations typically serve to reduce the likelihood of risk events occurring within an industry but do not involve transferring the inherent risks. Similarly, reducing operational capacity might lower exposure to certain risks, but it does not involve engaging another party to shoulder those risks.

Thus, the most effective way to transfer risk, as indicated in the correct choice, is through utilizing insurance or outsourcing.