Answer: Evaluate the trade-off between potential returns and associated risks.

### Explanation - **Option A (Incorrect):** Risk management is not about predicting the exact timing of crises. While risk managers aim to minimize surprises, they cannot foresee specific events, such as a real estate crisis causing defaults on securities. - **Option B (Correct):** A sound risk management process involves governance-level discussions to assess the balance between expected returns and potential losses, determining whether such risks are acceptable. - **Option C (Incorrect):** Ignoring low-probability but high-impact events is a flaw in risk management. A comprehensive process should account for all potential risks, regardless of their likelihood.

Author: LeetQuiz Editorial Team