Bachelor of Management Studies (B.M.S.) SEM V 2019 20 Nov 2019-20 FINANCE RISK MANAGEMENT Question Paper - Mumbai University | munotes

Questions asked in this paper

1. Q2 Q2 to Q5 having internal options
2. Q3 Figures to the right indicate full marks
3. Q4 State your assumptions clearly State whether the following statements are true or false (any 8) (08) if Beta measures volatility or risk If Jensen’s Alpha is positive , it reflects that the Mutual fund has exceeded the expectations and outperformed the Market portfolio and vice versa ili. Transaction exposure in Exchange rate risk impacts the future cash flows of a firm iv, Exercise price is a price at which the option buyer is eligible to buy or sell the underlying asset APT is an asset pricing model based on the idea that an asset’s return cannot be predicted using the relationship between that asset ad many common risk factors Vi. The third line of Defense includes Operational Management Vil. An end user of the project’s outcome is one of the internal stakeholder to the organization the money Option leads to negative cash flows to the holder if it were exercised immediately 1X. Enterprise Risk Management has one dimensional assessment (potential impact) a Risk Measurement is the collective responsibility of different people in the organization
4. Q1 B) Match the following (Any 7 Transaction Exposure and Translation Call and Put Standardized exchange traded Exchange of cash flows between two parties 7 marks
5. Q2 A) Define the term Risk? Explain the Risk Management Process 8 marks
   • B) Explain Arbitrage theory and Techniques 7
   • C) Calculate the expected returns and Standard deviation of Stock A and Stock The following is the information of stock A and Stock B under the possible states of nature 8
   • D) Write note on Risk Register 7
6. Q3 A) Explain Risk and the three lines of Defense (OR
   • B) Explain the challenges of Risk assurance in an (07) 3
   • C) Calculate Beta for each of the following two securities from the given information 15
7. Q4 A) What are the good practice principles for risk assurance? 8 marks
   • B) Define Stakeholder and explain the types of project stakeholders 7
   • C) Explain the powers, functions and duties of IRDA 8
   • D) What is Actuaries? Explain the role, duties and obligations of Actuaries 7
8. Q5 A) Suppose an insurer estimates that an insurance contract exposure has the following loss Assume that expenses, which are paid immediately, equal 20% of the expected claim cost Further assume that this type of policy requires a profit loading equal to 11% of the expected claim cost Calculate the fair premium
   • B) What is Reinsurance? State its types 7
9. Q5 Write short notes on (Any three) 15 marks
   • b) Derivatives
   • c) Risk Governance

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