W1-2-60-1-6
JOMO KENYATTA UNIVERSITY
OF
AGRICULTURE AND TECHNOLOGY
University Examinations 2014/2015
FOURTH YEAR SECOND SEMESTER EXAMINATION FOR
THE DEGREE OF BACHELOR OF COMMERCE
HBF 2403: FINANCIAL RISK MANAGEMENT
DATE: AUGUST 2014 TIME: 2 HOURS
INSTRUCTIONS: ANSWER QUESTION ONE (COMPULSORY) AND ANY OTHER TWO QUESTIONS
Question One (30 Marks)
a) Define financial risk management.
b) Briefly explain five benefits of financial risk management to an organization.
c) Outline clearly the risk management process and explain each step. (30 Marks)
Question Two (20 Marks)
Explain the meaning of market risk and briefly discuss four types of market risks. (20 Marks)
Question Three (20 Marks)
Briefly explain the five principles of corporate governance. Good corporate governance avoids the risk of collapsing of organizations. (20 Marks)
Question Four (20 Marks)
Define credit risk and explain briefly the impact it has on the investor (lending) (20 Marks)
Question Five (20 Marks)
Explain briefly the meaning of liquidity risk and point out its importance in financial transactions. (20 Marks)
