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Buss 324: Risk Management Question Paper

Buss 324: Risk Management

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2010

FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE (compulsory) and any Other TWO Questions

Question 1
a) Describe any two tools used to measure risks (4 marks)
b) What is the role of risk management to an economy (4 marks)
c) Describe the rationale of managing risk at a corporate level as opposed to functional operation (6 marks)
d) Explain the roles of a risk manager (8marks)
e) Briefly explain the relationship between risk management and increased shareholder wealth (8 marks)

Question 2
a) Explain how insurance has laid a base for risk management in the 21st century (10 marks)
b) Discuss the strategic approaches that has been adopted in the risk management by the modern business (10 marks)

Question 3
Charles and Lucy are married and own a 3 bedroom home in Nyali. Their own son John attends college from home and lives in a fraternity house. Their daughter Mary is in secondary school. Charles is an accountant who works for a local firm. Lucy is a marketing analyst and is often away from home several days at a time. Mary earns extra cash by baby sitting on regular basis. The family home contains house hold furniture, personal properties and a computer that Charles uses to prepare business tax returns on weekends and a laptop computer that Lucy uses while travelling. The couple also owns 3 cars. John drives a 1995 Ford, Charles drives a 2002 Pontiac for both business and personal use while Lucy drives a 2004 Toyota and a rented car when she is travelling. Although the couple has owned their home for several years they are considering moving because of recent increase in violence and crimes in their neighbourhood.
a) Describe briefly the steps in the personal risk mgt process. (5 marks)
b) Identify the major pure risks exposures to which Charles and Lucy are exposed with respect to each of the following.
i) Personal loss exposures.
ii) Property loss exposures.
iii) Liability loss exposures. (9 marks)
c) With respect to each of the exposures you’ve mentioned above, identify an appropriate personal risk mgt technique that could be used to treat the exposure. (6 marks)

Question 4
You have been invited for a workshop of risk management trainees. The organizer of the event requested you to address the audience on the topic; “Insurance and Risk transfer” Write a report giving the details of what you will include in your presentation under the following headings:
a) Characteristics of an insurance plan
b) Requirements of an insurance risks
c) Insurance contract (20 marks)

Question 5
You have been invited for a workshop of risk management trainees. The organizer of the event requested you to address the audience on the topic;
“Risk management process”
Given the outline below, write a report giving the details of what you will include in your presentation:
a) Objectives of risk management
b) Risk management process (20 marks)

Buss 324: Risk Management Question Paper

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