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
EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE

BMS 202: RISK MANAGEMENT
DATE: Monday 7th January 2008

TIME: 8.00am – 10.00am
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INSTRUCTIONS:
Answer ALL the four questions

Question 1
Zamalines is a public service transport firm with a fleet of 300 vans. The vehicles ply
between Nairobi, Mombasa, Kisumu and Eldoret ferrying passengers under the ‘prestige’
class. It has employed 350 drivers 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 Zamalines [10 marks]
(b)
Recommend appropriate risk control measures that can be instituted by Zamalines with specific reference to reduction, retention and transfer. [15 marks]

Question 2
(a)
Briefly explain the risk financing variables that can be used in risk management. [10 marks]
(b)
Giving relevant examples, discuss the ways in which risks can be classified. [15 marks]

Question 3
(a)
‘Insurance has its own benefits as a tool of risk management’. Discuss this statement with specific reference to the benefits of insurance. [10 marks]
(b)
Explain the role of the insurance broker in risk management and insurance in particular. [15 marks]

Question 4
Kabasi, 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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