There are four alternatives a project organization can adopt in deciding how to address their risks. ...

The four possible alternatives a project organization can adopt in deciding how to address their risks are to accept risk, minimize risk, share risk, and transfer risk. Scenarios are limited only by the bounds of your students' imaginations, but as a general rule, the motivation for each strategy are outlined below.
Accept risk  Risks of a minor nature are probably present in a matter of course, but because their likelihood and or consequence are so small, they are deemed acceptable and are worth little to no attention because the expense outweighs the benefit.
Minimize risk  Strategies to minimize risk seek ways to prevent risks from occurring or to minimize impact if they do occur.
Share risk  Risk can be allocated among project members, either subcontractors, or different departments, or between customer and project organization. The risk that is evenly distributed will lessen the burden on any one player, but contracts are best signed up front to minimize the amount of finger-pointing that occurs once the risk is realized.
Transfer risk  Transfer of risk is done contractually; the benefit to the transferring party is that the risk is no longer theirs, although this lightened burden comes at some expense.
The best approach depends on the risk involved and the mindset of the project organization. Minimal risk should be handled with acceptance; more serious risk can be handled with acceptance or some other means depending on the resources the company can bring to bear.