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Risk Management

decisions should be taken at the planning stage of a
Project. Any attempt to make such changes to an existing
operation involves either major inconvenience/disruption
to the business or substantial expense. So, before
undertaking any major investment, it should be subjected
to full risk appraisal, as it is more cheaper or economic to
avoid risks at the early stage and to construct risk
reduction devices or make modifications.

Q2. For effective performance of his functions a Risk
Manager requires the support of general
management and functional managers in his
organization. Elaborate the statement.

Ans. Refer Q3 May 2005

Q3. There are two forms of transfer of risk(other than
insurance). Describe the two forms and discuss
the various issues involved in these forms.

Ans. The transfer of risks can take two forms:
(a) The transfer of the activity that creates the risk
(b) The transfer of the financial losses arising from the
occurrence of the risk

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