Risk Management Question Paper

Risk Management

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2008

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2007/2008
INSTITUTE OF OPEN LEARNING
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE

BMS 202: RISK MANAGEMENT

DATE: Thursday 10th July 2008 TIME: 10.30am – 12.30pm

INSTRUCTIONS: Answer ALL four questions

Question 1
Eastlines is a public service transport firm with a fleet of 300 vans. The vehicle ply
between Nairobi, Mombasa, Kisumu and Eldoret ferrying passengers under the ‘prestige’
class. It has employed 350 drivers and at any time one vehicle has only one driver. The
firm is also involved in the transportation of parcels to various destinations in Kenya.
(a)
Clearly identify the risks facing Eastlines.

[10 marks]
(b)
Recommend appropriate risk control measures that can be instituted by Eastlines
with specific reference to reduction, retention and transfer.
[15 marks]

Question 2
(a)
Explain the techniques that can be used in the identification of risks that a
business organization may be facing.

[15 marks]
(b)
Giving relevant examples, discuss the ways in which risks can be classified.

[10 marks]

1

Question 3
(a)
‘Insurance has its own limitations as a tool of risk management’. Discuss this
statement with specific reference to criticism advanced.

[10 marks]
(b)
Explain the role of the insurance broker in risk management and insurance in
particular.

[15 marks]

Question 4
Nakale, a huge multi-national company is considering starting a subsidiary dedicated to
underwriting risks of the parent group. You have been approached as an expert in risk
management to advise on the reasons necessitating the establishment of captives.

[25 marks]

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2

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