Risk Management Question Paper

Risk Management

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2008

KENYATTA UNIVERSITY
INSTITUTE OF OPEN LEARNING (IOL)
UNIVERSITY EXAMINATIONS 2007/2008
SPECIAL/SUPPLEMENTARY EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE

BMS 202:
RISK MANAGEMENT

DATE: Wednesday, 8th October, 2008
TIME: 1.00 p.m. – 3.00 p.m.
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INSTRUCTIONS:
Answer question ONE and any other TWO questions.
Question 1
a)
Giving relevant examples, discuss the ways in which risks can be classified (15 marks)
b)
In Wakwetu Company, the likelihood of an accident is 0.3. the likelihood of this accident involving a small car, van or bus is 0.2, 0.3 and 0.5 respectively. Irrespective of the type of vehicle involved, the accident could be fatal or non-fatal. The likelihood of a fatal accident of a small car is 0.3; fatal accident of a van is 0.5 and fatal accident of a bus is 0.2. Determine the likelihood of:
i)
A small car accident and it being fatal (3 marks)
ii)
Having an accident of the van (3 marks)
iii)
Having a bus accident and it being non-fatal (3 marks)
iv)
Having a van accident and it being fatal (3 marks)
v)
Having a fatal accident of anything other than the van (3 marks)

Question 2
a)
Explain the techniques that can be used in the identification of risks that a business organization may be facing(10marks)
b)
Explain how checklists can be used in the identification of risk with specific reference to the different styles of checklists(10 marks)

Question 3
a)
Briefly explain the risk financing variables that can be used in risk management(10 marks)
b)
Explain the role of the insurance broker in risk management and insurance in particular
(10 marks)

Question 4
Zawaka, 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 various alternatives of this arrangement available in the
market. Prepare a report to the board of directors highlighting the options available
(20 marks)

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