Introduction to Risk Management
PROF. ALBERTO FLOREANI
COURSE AIMS
The course provides an introduction to risk management for businesses.
COURSE CONTENT
PROGRAMME AT A GLANCE
1.
–
–
–
–
2.
–
–
–
–
3.
–
–
–
4.
–
–
–
Risk and risk management
Concept of risk.
Risk management: objectives and explanation.
Business risks.
Enterprise risk management
Risk measures and economic capital model
Representation of risks through random variables.
Expected value. Standard deviation.
Value at risk (VaR).
Economic capital.
Company values and risk management decisions
Measurement of company values.
Expected discounted cash flow method and different approaches to adjustment
for risk.
Risk management decisions as seen from the standpoint of creating enterprise
value.
Insurance risk management:
Qualitative assessment and estimation of pure business risks.
Estimation and semi-quantitative assessment of pure risks.
Means for handling pure risks and insurance as a tool of risk management.
INSTRUCTIONAL OBJECTIVES OF THE COURSE
In completing this part of the course, the student is expected to
– be familiar with the main measures of business risk used, and able to apply
their properties for solving several business problems.
– know the means for measuring the value created by risk-management decisions
and be able to apply them to the resolution of several business problems;
– be familiar with the main instruments of estimation and qualitative and semiquantitative valuation of pure risks (probability-impact matrices, ALARP
approach) and able to apply them to solve several business problems. In
addition, the student should be familiar with the main instruments for the
treatment of pure risks and able use them for solving several basic problems of
evaluating their economic convenience.
– be capable of resolving certain problems of measuring exposure to financial
risks through VaR (risk control) and to organize various static hedging
transactions with derivatives instruments (futures and options).
READING LIST
A. FLOREANI, Lecture notes, 2014-2015, text available on Blackboard in the section dedicated to the
course.
TEACHING METHOD
The course will be taught through lectures and assignments. The instructional materials
(slides and other documentation) will be made available on the Blackboard page for the
course.
ASSESSMENT METHOD
The course includes classroom teaching and exercises. Instructional material (slides and
other documents) is made available on Blackboard course webpage.
NOTES
Further information can be found on the lecturer's webpage at
http://docenti.unicatt.it/web/searchByName.do?language=ENG or on the Faculty notice
board.