Financial Risk Management

Intructor: Umair Munaf Moon

Course Description:

This course is designed to provide students with an in-depth understanding of financial risk
management principles and techniques. Financial risk management is a crucial aspect of contemporary
business operations, particularly in the dynamic and interconnected global financial markets. The course
will cover various types of financial risks, including market risk, credit risk, liquidity risk, and operational
risk. Through theoretical concepts, real-world case studies, and practical exercises, students will develop
the skills necessary to identify, assess, and manage financial risks in corporate environments.

Learning Objectives:

 Gain a solid understanding of risk and return.

 Identify and measure different types of financial risks inherent in corporate environments.
 Develop skills for monitoring and reporting financial risks to enhance organizational risk
awareness.
 Implement effective mitigation and control measures for diverse financial risks.
 Explore and comprehend various risk-related regulations and guidelines applicable in Pakistan
and globally.

Topics Covered:

1. Introduction to Financial Risk Management

 Definition and types of financial risks
 Importance of risk management
 Overview of financial markets
 Key concepts of Risk Management Framework
2. Market Risk Management
 Measurement and management of interest rate risk
 Foreign exchange risk and its hedging strategies
 Equity risk management
3. Credit Risk Management
 Credit risk assessment
 Importance of Credit risk rating
 Understanding Obligor and Facility Risk Rating
4. Liquidity Risk Management
 Liquidity issues and consequences
 Sources and measurement of liquidity risk
 Liquidity risk management strategies
5. Operational Risk Management
 Understanding Operational Risk
 Identification and assessment of operational risk
 Operational risk management tools
6. Quantitative Techniques in Risk Management
  Value at Risk (VaR) and its applications
 Risk Adjusted Return on Capital (RAROC)
 Stress testing and scenario analysis
7. Regulatory Environments
 Basel III
 International Financial Reporting Standard 9

Assessment:

 Midterm Examination - 30%

 Assignments / Case Studies - 10%
 Class Participations – 10%
 Quiz - 10%
 Final Examination - 40%

References:

 "Risk Management and Financial Institutions" by John C. Hull

 "Value at Risk: The New Benchmark for Managing Financial Risk" by Philippe Jorion
 "Financial Risk Manager Handbook" by Philippe Jorion

Note: The course outline is subject to modification based on the instructor's discretion and any updates
in the field of financial risk management.