Question 4 (14 Marks) a. What is frisk management' in the context of insurance? Identify and explain two pre-loss and two post-loss objectives of risk management. 5 marks b. As Risk Manager for Green Petroleum Group, Jason has identified the following two mutually exclusive risk control projects: Year Cash Flow (Project A) $ -10,000,000 1,300,000 1,800,000 2,500,000 3,100,000 3,600,000 0 1 2 3 4 5 Cash Flow (Project B) $ - 10,000,000 970,000 1,700,000 3,000,000 4,000,000 2,700,000 WN i. Assuming that the market interest rate is 5%, calculate the net present value (NPV) for each of these projects: Project A and Project B. ii. As Risk Manager of Green Petroleum Group, which project will Jason choose if he applies the Net Present Value (NVP) decision rule? iii. Apart from the estimated net after-tax cash flows, what are the other relevant factors that Jason, as the risk manager, should consider? Explain your answers and show all your calculations. 9 marks