Risk Management Syllabus

1. General information
Faculty: Management
Major: Bachelor of Management and Law
Course: Risk Management
Course number: ____
Credit: 2
Prerequisite: ____
2. Course description
Risk management course is of importance to business students expecting to deal
with business and professional lives in the future. This course is designed to
introduce and discuss various risk management concepts, tools, and techniques in
global context. Using integrated approaches, the course will emphasize discussion
on the design and implementation of risk management practices. Basically, it
purport to help students realize, understand, and master various state-of-the art risk
management theories and practices (such as loss control, loss financing and
internal risk reduction mechanisms) as well as advancement in the future.
3. Course objectives
Knowledge: To provide students with an understanding of the basic tools
employed in managing financial risks. The course focuses on how firms use
range of derivative instruments including forward, future options and swap
contracts to manage financial price risks
Understand the meaning of risk
Understand the role and purpose of risk management
Understand the core element of the risk management process
Understand the different categories of risk
Understand current trends in risk management
Understand the position of insurance within risk management
Skills: by the end of this course it is expected that the student will be able to
Price a range of derivative securities
Identify risk management issues facing investor and corporations
Implement risk management strategies
4. Textbooks and Reading Materials
Textbooks:

Hull (2014), Fundamentals of Futures and Options Markets (8th

International Edition), Person
Reading material
- Nguyn Th Ngc Trang (2006), Qun tr ri ro ti chnh, NXB
Thng k
- John Hull (2012), Futures, Options, and Other Derivatives
seventh edition
- Nguyn Minh Kiu (2012), Qun tr ri ro ti chnh, NXB Ti
chnh
-

5. Course Schedule
Chapter 1: Introduction to Risk Management
1.1 Exchange traded markets
1.2 Over the counter markets
1.3 Forward contracts
1.4 Future contracts
1.5 Options
1.6 Types of traders
1.7 Hedgers
1.8 Speculators
1.9 Arbitrageurs
1.10 Danger
Chapter 2: Mechanics of future market
2.1 Background
2.2 Specification of a future contract
2.3 Convergence of futures price to spot price
2.4 The operation of margins
2.5 OTC markets
2.6 Market quotes
2.7 Delivery
2.8 Types of traders and types of orders
2.9 Regulation
2.10 Forward vs. futures contracts
Chapter 3: Interest rates
3.1 Types of rates
3.2 Measuring interest rates
3.3 Zero rates
3.4 Bond pricing
3.5 Determining Treasury zero rates
3.6 Forward rates
3.7 Duration
Chapter 4: Swaps

4.1 Mechanics of interest rates swaps

4.2 Day count issues
4.3 Confirmation
4.4 The comparative advantage argument
4.5 The nature of swap rates
4.6 Determining the LIBOR/swap zero rates
4.7 Valuation of interest rate swaps
4.8 Currency swaps
4.9 Valuation of currency swaps
Chapter 5: Mechanics of option markets
5.1 Types of options
5.2 Option position
5.3 Underlying assets
5.4 Specification of stock options
5.5 Trading
5.6 Commissions
5.7 Margins
5.8 The options clearing corporation
5.9 Over the counter markets
Chapter 6: Credit risk
6.1 Credit ratings
6.2 Historical default probabilities
6.3 Recovery rates
6.4 Estimating default probabilities from bond prices
6.5 Comparison of default probability estimates
6.6 Using equity prices to estimate default probabilities
6.7 Credit risk in derivatives transactions
6.8 Credit risk mitigation
6. Course policy
Lecturer will specify objectives, curriculum and references of the course for all
students. In addition, how to assess the learning outcome of students and all others
related information (name, phone number, email)
7. Grading system: 10/10
8. Course assessments
Mid-term test: 30%
Final examination: 70%
Item

Duration

Type

Weight

Due Date

Mid-term test
Final Exam
Total

Essay
Assignment
Presentation
Essay

30%
70%
100%