Study-Unit Description

Study-Unit Description


TITLE Risk Management Theory and Practice

LEVEL 05 - Postgraduate Modular Diploma or Degree Course



DESCRIPTION This study-unit takes students through the various ways in which European Companies are affected by risks in the global course of their business, and how they may deal with such risks. Case studies will be used to develop the students' understanding of the risks and rewards inherent in international business operations.

The topics covered are intended to provide students with knowledge on how risk exposures are identified, understood, measured, monitored and managed within the European Regulatory Framework.

Students will be exposed to widely accepted and regulatory required (Solvency and Capital Requirement Directive) measures of risk, such as Value-at-Risk, The Risk Register and analytical and numerical methods (Greeks) used in the computation of risk measures.

The content of the study-unit is a mix of quantitative and qualitative approaches using tools such as Ms Excel, with all the required knowledge of mathematics, statistics and interpretation provided during the lectures.

Non-technical students will be guided through the content and a strong emphasis on practical aspects of risk management is maintained throughout. The coursework provided ensures that students grasp the practical side to risk measurement and management.

Study-unit Aims:

i) To provide students with definitions of Risk and Risk Management and the role of the risk manager;
ii) To familiarise students with the models and mechanics behind the measurement and the management of the major risks such as Operational, Strategic, Reputation, Market and Credit risks;
iii) To familiarise students with the Greeks, and their use in the treasury and regulatory reporting environment;
iv) To demonstrate the logic behind numerical methods to problems arising in risk analysis;
v) To explain industry standard risk measurement concepts including for example value-at-risk and the use of a risk register and the calculation of economic capital.

Learning Outcomes:

1. Knowledge & Understanding
By the end of the study-unit the student will be able to:

i) Identify the nature of the problem in risk measurement and management;
ii) Explain the most popular methods applied to the problem of risk measurement;
iii) Compute mathematical results from the literature and reproduce other results from the theory underlying risk management;
iv) Evaluate the benefits and limitations in managing risk and the underlying theoretical models;
v) Create models using Excel to calculate Risk.

2. Skills
By the end of the study-unit the student will be able to:

i) Evaluate strategies for measuring and managing risk;
ii) Evaluate and compute risk measures both analytically and numerically;
iii) Implement and evaluate procedures;
iv) Interpret measures of risk and apply them to the process of managing financial risk;
v) Interpret news in the context of risk management;
vi) Evaluate the risk implications and how they may differ between countries;
vii) Critically analyse the various risks faced by companies with international operations and evaluate a range of control measures.

Main Text/s and any supplementary readings:

Main Text
- Hull, J., (2018). Risk Management and Financial Institutions 5th Edition, John Wiley (ISBN: 978-1-119-44811-2).

Supplementary Texts
- Damodaran, A., (2008).Strategic Risk Taking: A Framework for Risk Management. Pearson (ISBN: 978-0-13-704377-4).
- Damodaran, A., (2003). Investment philosophies: successful strategies and the investors who made them work , Aswath Damodaran. 2nd edition—Wiley finance series. [ISBN 978-1-118-01151-5 (cloth); ISBN 978-1-118-22192-1 (ebk); ISBN 978-1-118-23561-4 (ebk); ISBN 978-1-118-26049-4 (ebk)].

STUDY-UNIT TYPE Lecture and Tutorial

Assessment Component/s Assessment Due Resit Availability Weighting
Assignment SEM1 Yes 30%
Examination (2 Hours) SEM1 Yes 70%

LECTURER/S Julian Cardona
Simon Grima (Co-ord.)
Tyrone Mizzi

The University makes every effort to ensure that the published Courses Plans, Programmes of Study and Study-Unit information are complete and up-to-date at the time of publication. The University reserves the right to make changes in case errors are detected after publication.
The availability of optional units may be subject to timetabling constraints.
Units not attracting a sufficient number of registrations may be withdrawn without notice.
It should be noted that all the information in the study-unit description above applies to the academic year 2019/0, if study-unit is available during this academic year, and may be subject to change in subsequent years.