# Sample Prelim paper for Risk Management TYBMS Sem 6- April 2017

Prelim- Risk Mangement

Q1. Solve any 2 (15 marks)

1. Explain the risk management process
2. Explain the diversification and investment process for risk avoidance
3. Based on the following information, calculated the weighted beta and using the CAPM model advise on the strategy per company
 Company No if shares Beta MPS Expected return A 50000 1.2 12 19% B 10000 1.4 20 20% C 5000 0.9 55 18% D 20000 1.3 22 12%

Q2. Solve any 2(15 marks)

1.  An Indian company imports in dollars and the payment is due in 3 months. The invoice amount is \$13750 and today’s spot rate is 1INR= 0.0275\$ which is equivalent to Rs 5 lakhs. It may happen that the exchange rate may decline by 5% over 3 months. A 3 month forward contact is available for 0.0273\$. How can you reduce the forex risk in this case.
2. Explain the Markowitz and Arbitrage theory of risk mitigation
3. Explain the ERM Matrix

Q 3. Solve any 2( 15 marks)

1. Explain the 3 line of defence model
2. What is Assurance and why is it needed
3. Who are the various stakeholders and how do they assure that risk are mitigated.

Q4. Solve any 2( 15 marks)

1. Elaborate the role on actuary in the risk management for insurance
2. Concepts:- Reinsurance, Bankassurance, Alternative Risk Transfer
3. Explain the general insurance claim management process

Q5. A. A table depicting various types of insured and their age along with sum assured and their class category is given. Calculate the tentative expected claim cost (5 marks)

 Gender Age Sum Insured Base rate Risk class(%) Male 45 100000 2.5 125% Male 50 200000 2.75 150% Male 58 300000 1.56 200% Female 60 150000 3.01 100% Male 35 150000 1.4 100%

B Expected loss are as follows (5 marks)

Loss values (Rs)                    Probability

100000                                  0.02

20000                                    0.08

Find fair premium if policy provides full coverage, underwrtting cost is 30% of pure premium, claim are paid at the end of the year, interest rate is 9%, processing cost is Rs 750/- and fair profit is 10% of pure premium

c. Explain the various ways to hedge FOREX exposures. (5 marks)

The following two tabs change content below.

#### vipin0785

Education Qualification: BMS- N M College (University Rank Holder) PGDBM- Sydenham College M Com- College topper Mr Vipin Saboo has been associated with the following institutes as a visiting faculty Lords college, Malad Patkar College, Goregoan Saraf college, Malad Dalmia college, Malad St Andrews College, Bandra Wilson College, Grant Road Thakur college, Kandivili L N College, Kandivili N K College, Malad Dhanukar College, Vile Parle St Xaviers College, Marine Lines Shroff College, Kandivili KES College, Khar Mr.Vipin Saboo also has more than 5 years of industry expertise with corporate like CRISIL, Motilal Oswal Investment Banking and Yes Bank. Mr. Saboo has also published a text book on Logistics and Supply Chain Management for TYBMS Students.

## Like it? Share with your friends!

1. hello sir, please mention the values for current market return and Risk free rate for below metioned sum of prelim paper
Q1 /3 )Based on the following information, calculated the weighted beta and using the CAPM model advise on the strategy per company
Company No if shares Beta MPS Expected return
A 50000 1.2 12 19%
B 10000 1.4 20 20%
C 5000 0.9 55 18%
D 20000 1.3 22 12%

2. Geetanjali says:

What is the solution for expected claim cost plz provide fast

Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme