Financial Risk Management Analysis Course Outline

COURSE OUTLINE
FINANCIAL RISK MANAGEMENT ANALYSIS
1. COURSE DESCRIPTION
This course introduces students to the identification, measurement, and management of
financial risks faced by firms and financial institutions. It combines theoretical foundations,
quantitative tools, and practical applications in modern finance.
2. COURSE OBJECTIVES
By the end of the course, students should be able to:
 Identify different types of financial risks
 Measure and analyze risk using quantitative methods
 Apply financial instruments (derivatives) for hedging
 Evaluate risk management strategies in firms
 Understand regulatory frameworks (Basel accords, etc.)
3. COURSE CONTENT
Module 1: Introduction to Financial Risk Management
 Definition and importance of risk management
 Types of financial risks (market, credit, liquidity, operational)
 Risk-return trade-off
 Role of risk management in firm value
 Risk management process (identification → assessment → control)
Module 2: Financial Markets and Instruments
 Structure of financial markets
 Asset classes: equities, bonds, derivatives
 Market efficiency and behavior of asset prices
 Introduction to financial products
Module 3: Quantitative Tools for Risk Analysis
 Probability and statistics for finance
 Volatility measurement
 Correlation and diversification
 Time value of money
 Introduction to econometric tools
 Risk metrics and modeling techniques
Module 4: Market Risk Analysis
 Interest rate risk
 Foreign exchange risk
 Equity and commodity risk
 Value at Risk (VaR): methods (historical, parametric, Monte Carlo)
 Stress testing and scenario analysis
Module 5: Credit Risk Management
 Credit risk concepts and sources
 Credit scoring models
 Default probability and loss estimation
 Credit derivatives

 Credit portfolio management
Module 6: Liquidity and Operational Risk
 Liquidity risk measurement
 Funding vs market liquidity
 Operational risk (fraud, systems, processes)
 Risk control mechanisms
Module 7: Derivatives and Hedging Techniques
 Forward and futures contracts
 Options and option pricing (Black-Scholes model)
 Swaps
 Hedging strategies using derivatives
Module 8: Risk Measurement and Management Frameworks
 Enterprise Risk Management (ERM)
 Basel I, II, III frameworks
 COSO framework
 Regulatory environment and compliance
Module 9: Advanced Risk Analytics
 Monte Carlo simulation
 Scenario analysis
 Risk-adjusted performance measures (RAROC)
 Portfolio risk management
Module 10: Case Studies & Applications
 Risk management in banks and corporations
 Financial crises analysis
 Real-world risk failures and lessons
 Risk reporting and decision-making
4. Teaching Methods
 Lectures
 Case studies
 Practical exercises (Excel, software)
 Group discussions
5. Assessment Methods
 Continuous assessment (assignments, quizzes)
 Mid-term exam
 Final exam
 Group project / case study