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Din202 Question Paper

Din202

Course:Risk Management

Institution: University Of Nairobi question papers

Exam Year:2012

UNIVERSITY OF NAIROBI
SCHOOL OF BUSINESS

DEPARTMENT OF BUSINESS ADMINISTRATION

DIN 202: RISK MANAGEMENT
DATE: 7TH NOVEMBER 2012 TIME: 2.00 – 3.00 P.M.
INSTRUCTION:
1. Fill in your name and registration number in the spaces provided below.
2. Answer ALL questions in both SECTIONS A and B in the spaces provided.

NAME................................................................................................ REG. NO.........................................
SECTION A: PUT A CROSS (X) ON THELETTER CONTAINING THE CORRECT ANSWER
1. Which of the following is not a positive attribute of risk in a business firm?
A. Risk makes businesses to work harder.
B. Risk leads to profitability.
C. Risk increases creativity in business operations.
D. Risk encourages resource conservation and greater level of savings in a business.
2. One of the following is not among the recommended contents of a risk management policy statement. Which one is it?
A. It indicates the importance attached to preserving the assets of the firm.
B. It reveals priority risks.
C. It reveals approved measures.
D. It indicates the parties responsible for the frisk management function.
3. Only one of these statements is true. Which one is it?
A. Risk management manual is a detailed procedure for handling the loss exposures facing a firm.
B. Risk management manual covers pure risks in all units and activities.
C. Risk management manual provides the means for evaluating the implementation of the risk management policy.
D. Risk management manual classifies the risks and who to handle them.
4. In a firm with a risk management unit in its structure, its relationship with other functional units is?
A. To carry specific risks and the responsibility of handling them.
B. To coordination of risk management function due to interdependency.
C. To provide outsourced guidance.
D. To manage risks in all the other units.
E. To assist the units evaluate offers for risk advisory services.
5. Which of the following is not a use of a risk management manual?
A. Reference document.
B. Create awareness of risks in the firm among new staff.
C. Assessing risk management performance in the firm.
D. Training of staff.
6. Which is the odd one?
A. Objectives of risk management ensure that the risk management program is integrated into corporate purpose.
B. Objectives of risk management provide guidance for those not charged with the responsibility of risk management.
C. Objectives of risk management serve as a means of evaluating performance of the risk management function.
D. Objectives of risk management ensure that the function is recognised in the firm.

7. The third step in the risk management process is?
A. The determination of objectives.
B. Evaluation of risks.
C. Selection of treatment tools.
D. Identification of risks.
8. Risk management was not supported by insurers at inception due to?
A. Fear of loss of claims.
B. Lack of appreciation of benefits of risk prevention.
C. Fear of competition.
D. Fear of increase in level of awareness among insurance buyers.
9. The key contribution of the Risk Management Society was?
A. Sharing information on best techniques of selecting cost effective insurers.
B. Publication of Risk Management Journal.
C. Coordination of risk management activities.
D. Increased attention to risk management.
10. Which of the following is a demerit of having a written risk management policy statement in a business firm?
A. Establishes explicit objectives of the function.
B. Defines role of the unit and manager.
C. Coordinates the function across units and people.
D. Establishes communication and Risk Management Information System.

SECTION B: ANSWER THE FOLLOWING QUESTIONS IN THE SPACES PROVIDED
1. Describe ANY THREE credit risks that a business enterprise operating in Kenya and giving services on deferred terms of payment may face.
(i)-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(ii)----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------(iii)-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
2. What is the corporate risk management objective of meeting externally imposed obligations?
Give an example of each of such obligations and the parties involved.
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3. List the qualities of a good corporate risk management policy statement
(i)-------------------------------------------------------------------------------------------------------------------
(ii)------------------------------------------------------------------------------------------------------------------
(iii)-----------------------------------------------------------------------------------------------------------------
(iv)-----------------------------------------------------------------------------------------------------------------
(v)------------------------------------------------------------------------------------------------------------------
4. Explain the role of the head of the risk management unit in a business enterprise.
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5. Describe the purpose of risk management function in a business firm operating in Kenya
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Din202 Question Paper

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