FINAL EXAMS

COURSE : Risk Management

TIME : 90 Minutes
METHOD : Closed Book
LECTURER : Dr. Rita Zulbetti, S.Si,. MM

1. Explain with an example a work accident, and how to handle it !.

2. Credit risk and liquidity risk are the biggest challenges in banking management. Let me explain with
an example of these two risks, and in your opinion how to manage them!

3. One of the ways to anticipate the risks is to share the risk to other parties, ie to the insurance
company.
a. What are the basic principles of insurance business and what are the benefits of insurance
on the lives of people, companies and countries ?.
b. Explain what kind of risks that can and not can be insured !.

4. Here are daily earnings data from 4 companies for 3 days:

Return Risk
No. Code
Day 1 Day 2 Day 3 (Average) (stdev)
1 ADDI 0,01 0,01 0,00 0,01 ...
2 ELSA 0,05 0,00 0,01 0,02 ...
3 KLBF 0,05 0,07 0,02 0,05 ...
4 LPCK -0,02 0,00 0,07 0,02 ...
Known:
covariance ADDI-ELSA 0.77
covariance ADDI-KLBF 0.55
covariance ADDI-LPCK -0.96
covariance ELSA-KLBF -0.11
covariance ELSA-LPCK -0.55
covariance KLBF-LPCK -0.77

a. Calculate Risk (Standard deviation), each stock, then choose 3 companies which you think are the
most attractive shares!
b. Combine the 3 stocks (there will be 3 combinations) with 75% -25% and 45% - 55% comparison.
Then calculate the return, variance and standard deviation of the combination.
c. On which stock should we invest and by which comparison? Explain!!
……..good luck!...........