1. (i) Assets subject to fixed charges as opposed to floating charges cannot be dealt with while subject to the charge, except with the consent of the creditor holding the charge. The assets subject to a fixed charge cannot be dealt freely in the course of business. Venture Bhd is not free to sell, lease or in anyway deal with the land without Zest Bank Bhd express permission. Assets subject to fixed charge are identified at the time of creation of the charge, and the assets subject to the charge will not flactuate over time unlike a floating charge. (3 marks)

(ii) Disadvantages of a floating charge under the Companies Act 1965. The assets subject to a floating charge may be utilised to pay off certain preferential creditors, if the company does not have sufficient funds to pay them. See: ss.191 and 292(4) Companies Act 1965. Floating charges created within six months of the commencement of a winding up will be invalid except to the amount of cash paid to the company at the time of, or subsequent to, the creation of the charge, unless the company was solvent immediately after the creation of the charge. See: s.294 Companies Act 1965. (3 marks)

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