,Question 1 22 marks 1.1 In a management meeting, it was
decided that the company needs to establish the risk
management function. However, there were different views
about the main objective of risk management. Choose the
correct view about the responsibility of risk management. (2) a.
The chief executive officer held that the responsibility of risk
management would be to assess, control and finance critical
risks facing the organisation and report the outcomes to the
board. b. The chief financial officer stated that the responsibility
of risk management would be to assess critical risks facing the
organisation and communicate the assessment to management
and the board. c. The human resources director argued that the
responsibility of risk management would be to compile a report
on all risk exposures of the organisation for reporting to the
board. d. The compliance officer emphasised that the
responsibility of risk management would be to provide
assurance about the management of risks to stakeholders of the
organisation. 1.2 Eskom, South Africa’s largest electricity
provider, navigates a challenging and promising environment in
its mission to deliver reliable and sustainable energy to the
nation. The utility’s handling of debts is crucial for its financial
stability, operational efficiency, and environmental impact.
Despite these factors, Eskom’s decisions regarding liabilities
play a pivotal role in its financial stability. Eskom's total
liabilities increased from R77,000 million in 2006 to R480,000
million in 2016. Given that the liabilities in 2012 were 50%
higher than that in 2006, the total liabilities for 2012 would be
calculated as follows: (2) a. R115,500 million b. R480,000
million c. R38,500 million d. R557,000 million 1.3 Which of the
, following is not an example of unreimbursed losses? (2) a.
Underinsurance b. Franchise deductibles. c. Losses resulting
from risks with available insurance cover d. Uninsured Losses,
either intentionally or unintentionally Page 2 of 7 RSK4803
Tutorial Letter 102 © UNISA 2023 1.4 Comair Limited, a South
African airline, operated scheduled services domestically as a
British Airways franchisee and under its own budget brand, K.
The airline faced various challenges, including fluctuating fuel
prices, regulatory requirements, weather disruptions, and
passenger demand variability. These challenges directly affected
flight schedules, operational costs, and customer experiences.
During a particular disruption, around 191,000 passengers were
affected by flight cancellations and 78,000 passengers
experienced delays at Comair during the disruption. If Comair
had initially scheduled flights for 300,000 passengers, what
percentage of passengers were not directly affected by
cancellations or delays? (2) a. 10% b. 11% c. 31% d. 32% 1.5 In
terms of funding the organisation’s strategy, the job of the risk
manager is to … (2) a. provide adequate funds for managing
risks and select an appropriate funding ratio between capital and
debt. b. provide adequate funds for managing risks and guide
management to use less costly sources of funds. c. develop an
appropriate budget for risk financing and present it to
management and the board for approval. d. Ensure that
management and the board understand the probabilities
associated with the possible outcomes of the firm’s strategy
before resources are allocated. 1.6 What is the difference
between moral hazard and criminal hazard in the context of
insurance contracts? (2) a. Both terms are interchangeable and
