Documente Academic
Documente Profesional
Documente Cultură
P = Practical
SCL/O = Student Cantered
Learning/Others
A = Assessment
OL= Online Learning 22.48 0 0 16.5 7.69 0 0 73.33 120
OA = Online Assessment
SLPA= Self Learning
Preparation and Assessment
TLT = Total Learning Time
8. Credit Value: 3
1
10. Objective(s) of Course :
After completing this course, students should be able to:
i. understand how financial risk arises and how it can be managed.
ii. know major type of financial risks and its components such as market risk, credit risk,
operational risk and liquidity risk.
iii. acquire a clear understanding of the underlying theory, techniques and strategies of
managing financial risks.
iv. acquire knowledge on how to measure potential risk and losses.
v. understand the risk management standards in relation to regulation and compliance.
14. Synopsis:
Risk is an important element feature in any businesses. A company confronts risks associated with
the underlying business and financial risks related to market, operational, liquidity and credit risks.
These risks influence the decision making process and future performance of a company. In this
course, students will learn about the four major types of financial risks; how the risks can be
measured and managed. Hence, students will be exposed to risk measurement concept such as
Value at Risk (VaR) and examine various types of derivative that can be used to hedge financial risks.
Beside these, students will also gain insights about alternative risks transfer methods. Students are
required to complete a project related to financial risk management issues in order to enhance their
understanding about the subject.
2
Assessment Methods and Types:
16.
Coursework – 60%
- Quiz 1 – 5%
- Quiz 2 – 5%
- Quiz 3 – 6%
- Mid Semester Exam -15%
- Assignment 1 – Critical Evaluation of Literatures – 10%,
- Assignment 2 – Critical incident analysis and Presentation – 20%
Examination – 40% (Final Examination)
17. Mapping of the course/module to the Programme Aims
1 2 3 4 5
1 2 3 4 5 6
3
Demonstrate entrepreneurial skill and
capabilities in identifying business
opportunities
19. Content outline of the course/module and the SLT per topic
Face to Face
Learning
Topic Outcom OL SL TLT
SCL
es TL T P
/O
1. Introduction
1.1. Financial Risk Exposure
1.2. Identifying Major Financial Risk 1 3 3 6
1.3. What is Financial Risk Management?
3. Market Risk
3.1. Foreign Exchange Risk
3.1.1.Transaction Exposure
3.1.2.Translation Exposure
3.1.3.Foreign Exchange Exposure from
Commodity Prices
3.1.4.Strategic Exposure
3.2. Interest Rate Risk
3.2.1.Absolute Interest Rate Risk
3.2.2.Yield Curve Risk
3.2.3.Reinvestment / Refunding Risk
3.3. Commodity Risk 1
2,3 3 1 5 10
3.4. Commodity Risk
3.4.1.Commodity Price Risk
3.4.2.Commodity Quantity Risk
3.4.3.Contango and Backwardation
3.4.4.Commodity Basis
3.4.5.Special Risks
3.5. Equity Price Risk
4. Credit Risk
4.1. Settlement Risk During a Short
Window
4.2. Components of credit risk system
and the evolution of credit risk
measurement systems
4
4.3. How to construct the distribution 2,3 3 1 1 5 10
of credit loss for a portfolio
4.4. Correlations effect
4.5. How to manage credit risk
4.6. Basle requirements for credit risk
5
9.0 Financial Products and Risk Hedging
9.1 Introduction to Derivatives
9.2 Forward and Futures Contract
9.3 Options 5 3 3 6
9.4 Swaps
9.5 Exotic Options
9.6 Catastrophic bonds
9.7 Alternative Risk Transfer
Credit Hours 3
Main References:
Hull, J. C. (2010). Risk management and financial institutions. New Jersey: Prentice Hall.
Additional References:
Horcher, Karen A. (2005). Essentials of financial risk management. New Jersey: John Wiley & Sons,
Inc.
6
Chance, D. M. & Brooks, R. (2010). An introduction to derivatives and risk management. Canada:
South-Western
Cusatis, P. & Thomas, M. (2005). Hedging instruments and risk management: How to use derivatives
to control financial risk in any market. United States: McGraw-Hill.
Jorion, P. (2011). Financial risk manager handbook. New Jersey: John Wiley & Sons, Inc.
Murphy, D. (2008). Understanding risk: The theory and practice of financial risk management. United
States: Chapman and Hall/CRC.