Explanation:

• Option A is incorrect because it pertains to risk tolerance, not risk budgeting. Risk tolerance involves determining the organization's willingness to accept losses or opportunity costs, whereas risk budgeting focuses on quantifying and allocating the acceptable risk using specific metrics.

• Option B is correct because risk budgeting involves quantifying and allocating the tolerable risk using metrics such as standard deviation, beta, value at risk (VaR), and scenario loss.

• Option C is incorrect because it describes self-insurance, a form of risk acceptance. Self-insurance involves bearing a risk deemed undesirable but too costly to mitigate externally, often by setting aside reserves for potential losses.