Risk Management

Investors in financial markets and regulators expect corporations to establish an adequate and up-to-date risk management function. A proper understanding of risk management techniques is essential in today’s markets since the decisions of risk management professionals such as treasurers, risk analysts, risk controllers and portfolio managers may determine the fate of a whole institution.

This course is structured around case studies that allow students study the fundamentals of corporate financial risk management in diverse situations. It covers techniques to identify, measure and manage corporate financial risk for both financial and non financial institutions. Specifically, topics will include approaches to manage foreign exchange rate risk, interest rate risk and credit risk, static and dynamic hedging strategies and portfolio insurance techniques. Students will learn to apply different risk measures such as Value-at-Risk, Expected Shortfall, and also to analyze the impact of risk incidents on corporate (accounting) earnings and Cash Flows and corporate liquidity risk. The course will also address advantages and disadvantages of using hedging instruments such as futures, options, and credit default swaps (CDS) in order to limit a corporations exposure to risks. The course is both quantitative and application driven.

Upon completion of this course, you will:

• Gain an introduction and overview over modern risk modeling techniques for analyzing optimizing the risk position of a corporation;
• Understand how to apply hedging strategies using derivative instruments such as futures and options;
• Work with real world data and case studies.