This 3-credit course on Financial Risk Management introduces students to risk management techniques used in financial institutions. Over 15 weeks, students will learn about various types of risk like currency, interest rate, credit, and operational risk. They will also learn hedging approaches using tools like money markets, forwards, futures, and options. Assessment includes projects, quizzes, assignments, a midterm, and final exam. The course objectives are to familiarize students with risk categories, hedging approaches, and derivatives markets.
This 3-credit course on Financial Risk Management introduces students to risk management techniques used in financial institutions. Over 15 weeks, students will learn about various types of risk like currency, interest rate, credit, and operational risk. They will also learn hedging approaches using tools like money markets, forwards, futures, and options. Assessment includes projects, quizzes, assignments, a midterm, and final exam. The course objectives are to familiarize students with risk categories, hedging approaches, and derivatives markets.
This 3-credit course on Financial Risk Management introduces students to risk management techniques used in financial institutions. Over 15 weeks, students will learn about various types of risk like currency, interest rate, credit, and operational risk. They will also learn hedging approaches using tools like money markets, forwards, futures, and options. Assessment includes projects, quizzes, assignments, a midterm, and final exam. The course objectives are to familiarize students with risk categories, hedging approaches, and derivatives markets.
This 3-credit course on Financial Risk Management introduces students to risk management techniques used in financial institutions. Over 15 weeks, students will learn about various types of risk like currency, interest rate, credit, and operational risk. They will also learn hedging approaches using tools like money markets, forwards, futures, and options. Assessment includes projects, quizzes, assignments, a midterm, and final exam. The course objectives are to familiarize students with risk categories, hedging approaches, and derivatives markets.
Analysis of Derivatives by Don M. Chance. Financial Markets & Institutions: An introduction to Risk Management Approach by Anthony Saunders and Marcia Millon Cornett, Published July 21st 2003
Course Description The course explains the risk management types and techniques and its application in the financial institutions. The speculative hedging approaches critically demonstrate the management objective risk.
Reference Material: Investment Analysis and Portfolio Management, 8th Edition, Frank K. Reilly and Keith C. Brown Financial Markets and Institutions: An Introduction to Risk Management Approach, 6thEdition by Anthony Saunders and Marcia Millon Cornett
Course Objectives: 1. To acquaint the students with the categories of risk 2. To demonstrate the hedging approaches to manage risk 3. Introduction to derivatives markets and tools
Course Outcomes: Technical knowledge about the management of risk in financial and non-financial institutions
Assessment Instrument with weights
Project 10% Quizzes 5% Assignments 5% Midterm 30% End term 50%
Week 1 Introduction (Scope of the subject) Financial Markets and their role in the global economic system Emerging trends in the global Financial Markets Risk and its various types Week 2 Risk and Return relationship Identifying Major Financial Risks Foreign currency Risk Derivatives Markets, Past present and future, Purpose of derivative markets and its Criticisms Week 3 Interest Rate Risk Term structure of interest rate Theories for the determination of interest rate Risk Management Process Week 4 Money Market hedging: Hedging a Payment Hedging a Receipt Week 5. Forward (Advantages and Disadvantages) Pricing and Valuation of Forward Contract Currency Forwards Week 6 Future(Advantages and Disadvantages) Pricing and Valuation of Future Contract Week 7 Option Call option Put Option Use of Call option for speculation Use of Put option for speculation Week 8 Option Strategies o Bull Spread o Bear Spread o Butterfly Spread Week 9 Straddle Straggle Strip Strap Week 10 Credit Risk Methods to measure Credit risk o Qualitative based models Quantitative based models Linear Discriminant Analysis (Altman’s Z-Score model) etc Week 11 Operation Risk Types of Operational Risk
Week 12 Sovereign Risk Economic Factors Debt Rescheduling
Week 13 .Value at Risk Methods for Computing the VaR Assumption of VaR Week 14 Factors effecting Value at Risk Computation of VaR for each security in portfolio Portfolio VaR Marginal VAR and Component VAR
Week 15 Country Risk and its Importance Revision
