Installing an alarm system to a home is an example of

Avoidance involves eliminating the risk entirely, such as choosing not to own valuable items to prevent theft. While installing an alarm system reduces risk, it does not remove the risk of theft; thus, it cannot be classified as avoidance.

Retention is a strategy where individuals accept the risk and its potential consequences, often to save costs. Installing an alarm system indicates a proactive approach to managing risk rather than simply accepting it, which is why this choice is incorrect.

Loss transfer involves shifting the risk to another party, such as through insurance. While an alarm system does help protect against loss, it does not transfer the risk but instead seeks to minimize the impact of potential losses directly. Therefore, this option does not apply in this context.