Risk Management Syllabus

Risk management course is of importance to business students expecting to deal with business and professional lives in the future. This course is designed to introduce and discuss various risk management concepts, tools, and techniques in global context. Using integrated approaches, the course will emphasize discussion on the design and implementation of risk management practices. Basically, it purport to help students realize, understand, and master various stateofthe art risk management theories and practices (such as loss control, loss financing and internal risk reduction mechanisms) as well as advancement in the future

Risk Management Syllabus

1. General information

• Faculty: Management

• Major: Bachelor of Management and Law

• Course: Risk Management

• Course number:

• Credit: 2

• Prerequisite:

2. Course description

Risk management course is of importance to business students expecting to deal with business and professional lives in the future This course is designed to introduce and discuss various risk management concepts, tools, and techniques in global context Using integrated approaches, the course will emphasize discussion

on the design and implementation of risk management practices Basically, it purport to help students realize, understand, and master various state-of-the art risk management theories and practices (such as loss control, loss financing and internal risk reduction mechanisms) as well as advancement in the future

3. Course objectives

• Knowledge: To provide students with an understanding of the basic tools employed in managing financial risks The course focuses on how firms use range of derivative instruments including forward, future options and swap contracts to manage financial price risks

Understand the meaning of risk

Understand the role and purpose of risk management

Understand the core element of the risk management process

Understand the different categories of risk

Understand current trends in risk management

Understand the position of insurance within risk management

• Skills: by the end of this course it is expected that the student will be able to Price a range of derivative securities

Identify risk management issues facing investor and corporations

Implement risk management strategies

4. Textbooks and Reading Materials

• Textbooks:

- Hull (2014), “Fundamentals of Futures and Options Markets” (8th

International Edition), Person

• Reading material

- Nguyễn Thụ Ngọc Trang (2006), “Quản trị rủi ro tài chính”, NXB Thống kê

- John Hull (2012), “Futures, Options, and Other Derivatives” seventh edition

- Nguyễn Minh Kiều (2012), “Quản trị rủi ro tài chính”, NXB Tài chính

5. Course Schedule

• Chapter 1: Introduction to Risk Management

1.1 Exchange traded markets

1.2 Over the counter markets

1.3 Forward contracts

1.4 Future contracts

1.5 Options

1.6 Types of traders

1.7 Hedgers

1.8 Speculators

1.9 Arbitrageurs

1.10 Danger

• Chapter 2: Mechanics of future market

2.1 Background

2.2 Specification of a future contract

2.3 Convergence of futures price to spot price

2.4 The operation of margins

2.5 OTC markets

2.6 Market quotes

2.7 Delivery

2.8 Types of traders and types of orders

2.9 Regulation

2.10 Forward vs futures contracts

• Chapter 3: Interest rates

3.1 Types of rates

3.2 Measuring interest rates

3.3 Zero rates

3.4 Bond pricing

3.5 Determining Treasury zero rates

3.6 Forward rates

3.7 Duration

• Chapter 4: Swaps

4.1 Mechanics of interest rates swaps

4.2 Day count issues

4.3 Confirmation

4.4 The comparative advantage argument

4.5 The nature of swap rates

4.6 Determining the LIBOR/swap zero rates

4.7 Valuation of interest rate swaps

4.8 Currency swaps

4.9 Valuation of currency swaps

• Chapter 5: Mechanics of option markets

5.1 Types of options

5.2 Option position

5.3 Underlying assets

5.4 Specification of stock options

5.5 Trading

5.6 Commissions

5.7 Margins

5.8 The options clearing corporation

5.9 Over the counter markets

• Chapter 6: Credit risk

6.1 Credit ratings

6.2 Historical default probabilities

6.3 Recovery rates

6.4 Estimating default probabilities from bond prices

6.5 Comparison of default probability estimates

6.6 Using equity prices to estimate default probabilities

6.7 Credit risk in derivatives transactions

6.8 Credit risk mitigation

6. Course policy

Lecturer will specify objectives, curriculum and references of the course for all

students In addition, how to assess the learning outcome of students and all others related information (name, phone number, email…)

7. Grading system: 10/10

8. Course assessments

• Mid-term test: 30%

• Final examination: 70%

Mid-term test EssayAssignment

Presentation 30%

Final Exam Essay 70%