Risk Management Tools and Practices

About

This economics and finance course is an introduction to risk management techniques including the use of standard hedging instruments, asset-liability management and integrated risk management.

Upon completion of this course, participants will receive a certificate bearing the New York Institute of Finance (NYIF) name. A NYIF certificate is a valuable addition to your credentials, proving that you have acquired the work-ready skills that employer's value.

For those who wish to go further, students can enroll in the other four modules to earn the complete Risk Management Professional Certificate, backed by the New York Institute of Finance's 93-year history. As a final option, students may also opt to sit for the NYIF Certificate of Mastery Exam, resulting in the Risk Management Certificate of Mastery upon successful completion.

What you will learn

• Define the basis and the various sources of basic risk, and explain how basis risks arise when hedging with futures.
• Define cross hedging and the minimum variance hedge ratio and hedge effectiveness.
• Define and interpret the optimal number of futures contracts needed to hedge an exposure, including a “tailing the hedge” adjustment.
• Demonstrate how to use stock market index futures contracts to change a stock portfolio’s beta.
• Understand covered call and protective put strategies.
• Understand the purpose and pay-offs of various option spread strategies.
• Describe the ALM function of a typical commercial bank.
• Understand balance sheet risks associated with funding gaps and duration gaps.
• Define, compare and contrast economic capital, risk capital and regulatory capital.

Skills you learn

• Finance
• Asset Liability Management
• Risk Management
• Economic Capital
• Hedging
• Economics
• Risk Management Tools

Syllabus

Module 1: Risk Reporting

• Lesson 1: Profit Distribution
• Lesson 2: Risk by Risk Factor
• Lesson 3: Risk Over Time

Module 2: Model Risk

• Lesson 1: Sources of Model Risk
• Lesson 2: VaR Back Testing
• Lesson 3: VaR Exceptions
• Lesson 4: VaR Exposure Monitoring

Module 3: Risk Management Tools

• Lesson 1: Equity Swaps
• Lesson 2: Hedging with Index Futures

Module 4: Liquidity and Operational Risk Management

• Lesson 1: Liquidity
• Lesson 2: Liquidity Risk
• Lesson 3: Operational Risk Management

Module 5: Asset and Liability Management

• Lesson 1: Interest Rate Risk
• Lesson 2: Duration Gap Risk
• Lesson 3: Balance Sheet Immunization
• Lesson 4: Duration Gap vs Funding Gap
• Lesson 5: Banking Book vs Trading Book
• Lesson 6: ALM Governance