Summer School Courses  

Finance and Risk Management

Programme Description

The course teaches the main principles and methods in financial risk management and their applications in the global economy. After introducing the main institutions and instruments in financial markets, the course discusses the principles of finance and risk management and then illustrates how the main risk management tools can be applied to the management of financial portfolios. Students will analyse the use of financial derivatives for hedging and speculation in financial markets. The course also addresses the potential pitfalls of risk management and discusses how an inappropriate use of risk management tools might have exacerbated the financial crisis in 2008.

The course will be of interest to those looking to better understand financial markets, instruments and risk management. This is a general level course, however some knowledge of economics or finance may be useful. Students with degrees in physics, mathematics or computer science pursuing a financial career, or central bank employees, will gain an understanding of the key elements of finance and risk management. Individuals skilled in analysing derivatives and risks are in great demand in London, New York and other financial centres throughout the world. This course provides valuable learning in the principles of finance, banking and risk management areas, contributing to your future studies or career potentials.

Course Structure

Week 1: Finance and Risk Management: An Introduction

  • Financial markets, institutions and instruments
  • Principles of the analysis of financial portfolios
  • Principles of Investment in equities and bonds

Week 2: Risk Management using Futures and Options

  • Financial derivatives
  • Forwards and futures
  • Financial options: payoff profiles
  • Hedging strategies using futures and options     

Week 3: Risk Management in the Global Economy

  • Principles of the management in banking and finance
  • Market Risk, Credit Risk and Operational Risk in banking and finance
  • Corporate risk management in multinational corporations
  • The management of currency exposure: foreign currency futures and options