Buss 324: Risk Management Question Paper
Buss 324: Risk Management
Course:Business Administration
Institution: Kenya Methodist University question papers
Exam Year:2011
FACULTY : BUSINESS AND MANAGEMENT STUDIES
DEPARTMENT : BUSINESS ADMINISTRATION
TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions
Question 1
Kandie owns a hardware shop in Kaptembwa usually regarded as a high crime area in Nakuru county. The shop does not have a surveillance system. The high cost of burglary and theft insurance has substantially reduced his profits.
a) As a risk management consultant, explain to Kandie the methods other than insurance you would recommend in handling the burglary and theft exposure. Justify your answer. (10marks)
b) Highlight at least five principles of risk management (10marks)
c) Explain the meaning and the importance of the following basic characteristics of insurance.
i) Payment of fortuitous losses (5marks)
ii) Risk transfer (5marks)
Question 2
a) Explain the advantages and disadvantages of insurance (10marks)
b) Explain the conditions that must be fulfilled before retention is used in a risk management programme (10marks)
Question 3
a) Highlight four key steps involved in the effective risk management process (10marks)
b) Briefly discuss the benefits and costs of insurance to society (10marks)
Question 4
a) Risk management has important objectives, which include pre-loss and post-loss. Explain the activities involved in each of the two objectives. (10marks)
b) Define risk financing and explain three major risk-financing techniques (10marks)
Question 5
a) Highlight five sources of information that a risk manager can use to identify the proceeding loss exposure (10marks)
b) Define enterprise risk management and describe three categories involved in the enterprise risks (10marks)
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