CONFIDENTIAL BA/FEB 2023/INS657

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE RISK MANAGEMENT

COURSE CODE INS657
EXAMINATION FEBRUARY 2023
TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of five (5) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.

3. Do not bring any material into the examination room unless permission is given by the invigilator.

4. Please check to make sure that this examination pack consists of:

i) the Question Paper

ii) an Answer Booklet - provided by the Faculty

5. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 4 printed pages
© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL
CONFIDENTIAL 2 BA/FEB 2023/INS657

QUESTION 1

a) Distinguish the four (4) categories of hazards.

(10 marks)

b) Once risk management objectives had been determined, the board of director or the top
management of an organization must formulate a risk management policy on the basis of
ISO 31000 framework. In this regard:

i) State any five (5) principles of risk management as embedded in ISO 31000 framework.
(5 marks)

ii) Describe the differences between systematic and unsystematic risk that can be
identified from.
(5 marks)

QUESTION 2

a) Describe the general theory of Heinrich's domino theory and its connection to international
political context.
(5 marks)

b) Differentiate between Hazard and Operability Analysis (HAZOP) and Fault Tree Analysis
(FTA).
(5 marks)

c) A risk manager at Jakun Grocer is concerned about the number of perishable vegetables
from suppliers. The following are data collected by the risk manager on spoiled vegetables:

Amount of vegetable spoiled (kg) No. of Suppliers

0 8
1 12
2 4
3 2

i) Change the frequency distribution of suppliers to a probability distribution.

(2 marks)

ii) What is the probability of having at least 1 kg of vegetable spoiled?

(2 marks)

iii) What is the probability of having less than 2 kg of vegetable spoiled?

(2 marks)

iv) What is the probability of having exactly 3 kg of vegetable spoiled?

(2 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 3 BA/FEB 2023/INS657

v) What is the expected value of vegetable spoiled?

(2 marks)

QUESTION 3

a) Elaborate on the four (4) categories of engineering, system based, procedural and people-
based control.
(10 marks)

b) A manufacturer owns a building worth RM3,000,000. If he insures the building, the

premium will cost him RM80,000. The manufacturer's past losses have been on average
at an estimated value of RM200,000. The average rate of return on funds applied to
operation is 14% and the interest rate that can be earned on the invested reserved is 6%.
Calculate the cost of retention.
(5 marks)

c) Differentiate between pre and post loss control measures.

(5 marks)

QUESTION 4

a) A UiTM lecturer is using two (2) different methods of teaching in both Semester 1 2022
and Semester 2 2022. Grade distribution for each of the semester are as follows:

Semester 1 2022 Method Teaching 1

Marks No of Students
0-50 5
51-70 14
71-80 4
81-90 6
91-100 6

Semester 2 2022 Method Teaching 2

Marks No of Students
0-50 3
51-70 10
71-80 12
81-90 4
91-100 8

On the basis of expected values, variance and standard deviation of both semesters,
which method must be preferred by the lecturer?
(10 marks)

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

CONFIDENTIAL 4 BA/FEB 2023/INS657

b) Elaborate on the three (3) classification of unintentional, involuntary and funded risk
financing techniques.
(10 marks)

QUESTION 5

a) Elaborate on the four (4) rationales that justify risk monitoring process.
(10 marks)

b) Differentiate between Actual Cash Value and Replacement Cost in the context of building
and personal property.
(10 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 1 BA/FEB 2022/INS657/650/604/FIN610

FACULTY OF BUSINESS AND MANAGEMENT

FINAL ASSESSMENT

COURSE : RISK MANAGEMENT

COURSE CODE : INS657/650/604/FIN610
EXAMINATION : FEBRUARY 2022
TIME : 3 HOURS
PLATFORM : UFUTURE

INSTRUCTIONS TO CANDIDATES

1. This question paper consists of four (4) questions

2. Answer ALL questions. Start each answer on a new page.

3. Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of 3 printed pages

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 2 BA/FEB 2022/INS657/650/604/FIN610

QUESTION 1

Quwurt’s Photo Gallery has decided to purchase a new land as part of its marketing
development strategy. A real estate agent has recommended that the company purchase an
unimproved land somewhere in Pahang. Based on this information, discuss:

a) why the values of this unimproved land are difficult to determine?

(10 marks)

b) the perils that can caused damage to the unimproved land.

(10 marks)

c) the element of Morality ( Akhlaqiyyah) that comprise relationships between human

and his creator (ibadah) and human with Allah creation.
(5 marks)

QUESTION 2

KOKO Heerlik company involves in export and import of cocoa, which is based in Africa. The
cocoa was exported to many countries especially those countries that produce chocolates.
Due to the current covid-19 pandemic, the company suffered tremendous losses. Referring
to the above scenario:

a) Explain the international risks that directly impact the company business during this
covid-19 situation.

(15 marks)

b) Suggest with reasons three (3) essential insurance policies that the company should
purchase.

(10 marks)

QUESTION 3

a) A factory is measuring its losses due to a fire and the data gathered are as follows:

Range of losses (RM) Frequency

0 - 250 7
251 – 550 4
551 - 850 3
851 – 1,150 2
1,151 – 1,450 1

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 3 BA/FEB 2022/INS657/650/604/FIN610

Calculate the mean and standard deviation of the above losses.

(17 marks)

b) Company XYZ is considering installing the automatic sprinklers in its new building. Cost
of the automatic sprinklers is RM12,050,500. Annual insurance premium savings is
RM2,300,000. Annual maintenance cost is RM550,000. Reduction in uninsured loss
(cost) is RM500,450. Expected life of the automatic sprinkler is ten years and company
Star’s cost of fund is 10%. The present value of an annuity of RM1 at 10% for a period of
ten years is 6.145
Based on the information above and using cost-benefit analysis, calculate the following:

i) Company XYZ’s annual net cash inflow

(3 marks)

ii) Present value of net cash flow

(3 marks)

iii) State Company XYZ’s decision.

(2 marks)

QUESTION 4

a) Many crisis management experts noted that the term ‘crisis management’ could be defined
as special measures taken to solve problems caused by a crisis. Describe with examples
the two (2) components of an effective contingency planning.

(15 marks)

b) Explain with examples, five (5) factors influencing legal liability risk.

(10 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 BA/DEC 2019/INS657/650/604/FIN610
CONFIDENTIAL

UNIVERSITI TEKNOLOGI MARA

FINAL EXAMINATION

COURSE RISK MANAGEMENT

COURSE CODE INS657/650/604/FIN610

EXAMINATION DECEMBER 2019

TIME 3 HOURS

INSTRUCTIONS TO CANDIDATES

1 This question paper consists of five (5) questions.

2. Answer ALL questions in the Answer Booklet. Start each answer on a new page.
3. Do not bring any material into the examination room unless permission is given by the
invigilator.

4.
Please check to make sure that this examination pack consists of:
i) the Question Paper
ii) an Answer Booklet - provided by the Faculty
Answer ALL questions in English.

DO NOT TURN THIS PAGE UNTIL YOU ARE TOLD TO DO SO

This examination paper consists of4 printed pages
CONFIDENTIAL
©Hak Cipta Universiti Teknologi MARA
 CONFIDENTIAL
BA/DEC 2019/INS657/650/604/FIN610

QUESTION 1

a) Explain the importance of establishing the context of risk management.

(5 marks)

b) A good risk manager should be able to identify the various types of corporate risks.
Discuss the four (4) types of corporate risks associated with an organization.
(8 marks)

c) Distinguish the key differences between qualitative and semi-quantitative analysis in risk
management.
(7 marks)

QUESTION 2

a) Zee Sdn Bhd has claimsfor a group data as follows:

Amount of claims (RM) No of claims (f)

0-300 3
301-600 5
601-900 3
901-1,200 2
1,201-1,500 1

Based on the above data, calculate the mid-points (x) and standard deviation for Zee
Sdn Bhd.

(10 marks)
b) Cost-benefit analysis (CBA) is a tool to determine the worth of a project, programme or
policy. It is used to assist in making judgments and appraising available options The
following information is given:

Building value = RM8,399,000

Expected loss = RM100,500 (long-run average actual loss that occurred)
Investment return of company (R1) = 15%
Rate of return on reserve (R2) = 6%
Loading = (profit + expenses) = RM250.000

Based on the above information, calculate the following:

i) reserve
(2 marks)
ii) cost of financing risk
(2 marks)

© Hak Cipta Universiti Teknologi MARA

CONFIDENTIAL
CONFIDENTIAL 3 BA/DEC 2019/INS657/650/604/FIN610

iii) cost of risk retention

(2 marks)

iv) cost of insurance

(2 marks)

v) decide the most cost-effective options.

(2 marks)

QUESTION 3

a) Describe the roles of different positions in an organizational risk management

framework.
(5 marks)

b) Explain any four (4) types of international risks that a business may encounter
overseas.
(8 marks)

c) An organization's business objectives are seldom standalone and often overlap, which
requires for an enterprise risk management (ERM) framework. Describe the four (4)
classifications of an organization's business objectives.
(7 marks)

QUESTION 4

a) William Haddon's Energy Release Theory treats accidents as problems of physical

engineering. State five (5) Haddon strategies that are related either to suppress
conditions that cause the accident or to enhance conditions that may stop the accident
from happening.
(5 marks)

b) In managing the safety of goods and services, the Malaysian government may from
time to time declare any goods or any class of goods to be prohibited goods. With such
a declaration, discuss the supplier's requirement towards these goods.
(10 marks)

c) Describe the key steps of the risk management process as defined in ISO 31000.
(5 marks)

©Hak Cipta Universiti Teknologi MARA CONFIDENTIAL

 CONFIDENTIAL 4 BA/DEC 2019/INS657/650/604/FIN610

QUESTION 5

a) An organization must consider its risk appetite concurrently when deciding which goals
and operational tactics to pursue. Draw and explain a risk appetite cycle of an
organization.
(10 marks)

b) An Islamic approach to risk management requires compliance to Shariah principles with

islamic rules value added to the traditional risk management process. Discuss three (3)
elements of managing risk for individuals from the Shariah perspective.
(10 marks)

END OF QUESTION PAPER

© Hak Cipta Universiti Teknologi MARA CONFIDENTIAL