Subject outline
Subject’s title:
Subject’s instructor:
Risk management
Sági, Judit PhD, associate professor
Type of subject:
Level of the subject:
Credit points:
Language of education:
Compulsory in D Module
BA level year 3, semester 1.
3
English
Contact hours:
Lecture:
Students learning hours:
1 per Practice:
week
1.5 hours per week
1 per
week
Total:
2 per
week
Total:
written
Type of exam:
Prerequisites to qualify for subject:
Corporate Finance
Short description of the subject:
During this course, students are expected to gain definition of corporate risks and the
integrated corporate risk management solutions, insight into the future trends, for example
alternative risk transfer (ART).
Aims:
Since the risk and the risk management are integral parts of the everyday activity of
companies, it is very important to be able to understand, identify, analyse, measure, manage
and mitigate the most important types of risks. Accordingly, the aims of the course are to
introduce the students to:
- the importance of risk awareness and risk management
- the most important types of financial and non-financial risks
- the principles, tools and techniques of the enterprise risk measurement and management
Learning outcomes:
knowledge
 Understanding of risk, risk management in corporate context
 Competence in understanding the enterprise risk management framework
Learning outcomes:
skills
 Ability to calculate corporate risks
 Competence in develop of corporate risk management program
 Ability to evaluate corporate risk management processes
Teaching strategies and method of delivery:
The students are invited for compulsory attendance on the seminars. The attendance of the
lectures is highly recommended.
2
Compulsory reading:
Lam, James: Enterprise Risk Management, From Incentives to Controls, Wiley Finance,
2003.
The summary of the lectures and the seminar examples, available at the homepage
http://coospace.bgf.hu.
Recommended reading:
Merna, Tony – Al-Thani, Faisal: Corporate Risk Management. Wiley, 2008
Farkas Szilveszter – Szabó József: A vállalati kockázatkezelés kézikönyve. Dialóg Campus,
Pécs – Budapest, 2005
Assessment and grading:
Form of assessment: written exam.
At mid-term and at the end of the course, tests should be written. Both theory and calculations
are expected to be asked in the tests. Should someone fail to reach a minimum 60% of both,
he (or she) has to write a composite test during the exam period.
Topics of the session:
Lectures/weeks:
1. week lecture
Introduction to the subject. The benefits of risk management. Cautionary tales.
2. week seminar
Concepts and processes. What is enterprise risk management (ERM)?
Case study and exercise: Risk management function and environment
3. week lecture
Components of ERM: corporate governance, line management, portfolio management, risk
transfer, risk analytics, data and technology resources, stakeholder management.
4. week seminar
Risk analytics: risk control, risk optimization.
Case study and exercise: Investment appraisal
5. week lecture
Market risk, credit risk, credit risk portfolio models. Operational risk analytics.
6. week seminar
Case study and exercise: Business finance
Mid-term exam
7. week lecture
Risk transfer – ART. Brief history of ART, Advantages of ART, Pitfalls of ART.
8. week seminar
Case study and exercise: Cost of capital
9. week lecture
Credit risk management. Key credit risk concepts. Credit risk management process. Basel
requirements. Best practices.
10. week seminar
Case study and exercise: Credit risk management
11. week lecture
Operational risk management. Definitions and scope. Operational risk management
process. Business applications. Case study: Heller Financial
12. week seminar
Case study and exercise: FX rate management
13. week lecture
Financial institutions risk management: Industry trends. deregulation. Case study: CIBC
3
14. week seminar
Energy firms and nonfinancial corporations risk management. Case studies: Enron,
Microsoft
15. week
Final-term exam
Personally I wish all of you, students, and a useful time of period in learning this subject,
Taxation and subsidies.
Budapest, Sept, 2013.
dr. Sági Judit