Risk management and decision-making
The module takes an applied perspective, concentrating on decision-making in risky environments, which is of paramount importance to the finance industry.
Apart from identification of risk sources, the module offers a detailed analysis of tools and processes designed to manage these risks which are used by the financial industry. The latter is highly sought after in the financial industry.
- The Capital Asset Pricing Model
- Value at Risk
- Volatility, Correlations and Copulas
- Regulatory Risk
- Market Risk
- Credit Risk
- Scenario Analysis, Stress Testing and Operational Risk
- Liquidity Risk
- Model Risk
- ABSs, CDOs and, the Credit Crunch of 2007
If you complete the module successfully, you should be able to:
- describe and critically assess the processes through which companies make decisions in risky environments.
- explain how financial instruments can be used to manage portfolio risk.
- illustrate the following types of risk: credit, market, operational, reputational and regulatory.
- compare risk databases and their management.
- reason critically with respect to alternative risk management strategies.
- assess best strategies according to an available set of information and adapt appropriate strategies once a set of information changes.
- create the most suitable set of information for the decision-making process.
- measure the following types of risk: credit, market, operational, reputational and regulatory.
- professional financial tool skills and case study interpretation skills to support decisions.
- work both independently and in teams to create and manage financial strategies.
- present highly technical financial material to non-practitioners simply and clearly.
- utilise real-time data to estimate the different sources of risk.
- utilise financial tools and case studies to support strategic decisions.
- synthesise and use information and materials from a variety of different sources to support an argument.
- apply research skills into risk management problems and the application of these in business decision-making.
This module is assessed by:
Coursework (50% weighting):
- There is one item of coursework for this module which contributes to the final assessment mark for this module:
- Coursework: a written essay of a maximum of 2,000 or 2,500 words (deadline – weeks 9-12) The coursework is designed to check student progress, extend and reinforce concepts covered and also test individual performance.
Examination (50% weighting):
- The final piece of assessment will be an unseen written examination of 2 hours’ duration.
The following is provided as part of the modules materials after you register:
- J.C. Hull, Risk Management and Financial Institution, John Wiley and Sons, 2015
- S.L. Allen, Financial Risk Management, John Wiley and Sons, 2013
- P. Jorion,Value at Risk, McGraw-Hill, 2006