Module 3 — Financial Risk Manamgement, MBA

During the third module of the specialization, we are covering the issue of risk at financial markets. There are different kind of risks investors will face: price risk, interest rate risk, currency risk, credit risk, and liquidity risk.
After detecting the potential sources of risk, we need to quantify risk by applying risk measures like value-at-risk and duration. These steps allow for the hedging of risk: based on derivatives like options, futures, and swaps the risk in portfolios can effectively be reduced.

As in module 2, this course is based on Excel application, i.e. we perform risk measuring and hedging on specific problems.

TOC

  1. Introduction to Risk Management
  2. Price Risk
    – Measuring
    – Value-at-Risk
    – Maximum Drawdown
    – Hedging
    – Using Futures
    – Using Options
  3. Interest Rate Risk
    – Measuring
    – Value-at-Risk
    – Duration
    – Hedging
    – Immunization
    – Interest Rate Swaps
  4. Currency Risk
    – Measuring
    – Value-at-Risk
    – Hedging
    – FX Swaps
  5. Credit Risk
    – Measuring
    – Ratings
    – Credit VaR
    – Hedging
    – Credit Default Swaps