ANSWER THE QUESTIONS AFTER READING THE CASE STUDIES

1. John had engaged Bakri, an advocate and solicitor to act for him in the purchase of land from one Chan Po Po for RM30,000. Bakri had prepared a sale and purchase agreement on 12 June 2012 and the sale was completed on 6 July 2012. In a Gazette Notification no, 13 dated 15 March 2011, the land had been gazetted for acquisition by the government, under Section 8 of the Land Acquisition Act, 1960. Evidence revealed that Bakri did not make a search enquiry with the Collector of Land Revenue in the Land Office concerned and thus was not aware of the gazette notification. On 3 January 2013, John was paid RM15,000 by the government for the acquisition of the said land. John claims damages amounting to RM15,000 being the difference between the purchase price and the compensation. Advise John.

2. Which of the following is an example of a businessperson using networking techniques to develop

professional financial relationships:

A. A financial planner calls a long-term client to set up an appointment to discuss the client's

financial accounts.

B. A bank teller processes a customer's check-deposit request and gives the customer a receipt.

C. An insurance agent gives his business card to several small-business owners at a chamber-ofcommerce meeting.

D. A finance manager asks employees if they have anything they would like to discuss during the

departmental meeting.

3. One way for a company to manage its risk in relation to its employees' workplace behavior is by

A. allowing employees to view all company records.

B. providing employees with the flexibility to change company policies.

C. encouraging employees to report workplace misconduct.

D. permitting employees to use company resources for personal use.

4. How do ethics relate to risk management?

A. Risk management is all about the ethical treatment of customers.

B. The best form of risk management is adherence to business ethics.

C. Risk management is insurance for lapses in business ethics.

D. The best form of business ethics is risk management.

5. To reduce the risk of loss due to fire or power outages, a financial business should protect its computer

data by

A. using encryption techniques. C. implementing an authorization process.

B. conducting backup procedures. D. monitoring data-transmission rates.

6. When businesses continuously monitor the laws and implement changes to remain in compliance, they

are

A. demonstrating negligence. C. interpreting contracts.

B. controlling their risks. D. increasing their liabilities.

7. Which of the following statements is true regarding risk retention groups:

A. The insurance policy holders are also the company's stockholders.

B. A risk retention group may insure companies from many different industries.

C. Group members control risk by retaining equity and transferring liability to external sources.

D. Risk retention groups tend to pay higher licensing fees than traditional insurance companies.

8. Which of the following situations is an example of a business controlling its internal risks:

A. A law firm allows its malpractice insurance to lapse.

B. A service business hires illegal immigrants and pays them low wages.

C. A manufacturer inspects and maintains its equipment on a regular basis.

D. A retailer sells a particular line of goods below cost.

9. Why is the choice of a risk measure for internal and external risk of great practical importance?

A. It determines the maximum number of clients that can be served effectively by a financial

institution.

B. It determines the minimum reserve requirements in financial trading.

C. It identifies the types of risks that the financial institution will encounter.

D. It designates the audience that will receive the resulting financial reports.

10. The management function of business is usually responsible for

A. preparing ads. C. setting policy.

B. serving customers. D. stocking shelves.