Financial Risk Management

Module code: MN7527

Module co-ordinator: Dr Sandro Sozzo

Module Outline

This module provides an overview of risk management, forward and future markets, the Capital Asset Pricing Model and Arbitrage Pricing Theory, swaps, options and corporate finance, warrants and convertibles, risk management strategy, interest rate risk and security design.

At the end of this module students will:

  • Understand the nature of financial risks.
  • Understand the trading rules for financial derivatives.
  • Understand how financial derivatives can help to hedge financial risks.
  • Have the ability to evaluate alternative methods available and their shortcomings in hedging.
  • Have the ability to take decisions on whether or not to hedge a particular financial risk. 

Topics

  • Risk management
  • Forward and future markets
  • Capital Asset Pricing Model
  • Arbitrage Pricing Theory
  • Swaps
  • Options and corporate finance
  • Warrants and convertibles
  • Risk management strategy
  • Interest rate risk
  • Security design

Learning

113 hours of guided independent study

Assessment

Two-hour exam (100%)