Risk Management Tools and Practices from edX

This economics and finance course is an introduction to risk management techniques including the use of standard hedging instruments, asset-liability management and integrated risk management.

Upon completion of this course, participants will receive a certificate bearing the New York Institute of Finance (NYIF) name. A NYIF certificate is a valuable addition to your credentials, proving that you have acquired the work-ready skills that employer’s value.

For those who wish to go further, students can enroll in the other four modules to earn the complete Risk Management Professional Certificate, backed by the New York Institute of Finance’s 93-year history. As a final option, students may also opt to sit for the NYIF Certificate of Mastery Exam, resulting in the Risk Management Certificate of Mastery upon successful completion.

What you'll learn

Define the basis and the various sources of basic risk, and explain how basis risks arise when hedging with futures.
Define cross hedging and the minimum variance hedge ratio and hedge effectiveness.
Define and interpret the optimal number of futures contracts needed to hedge an exposure, including a “tailing the hedge” adjustment.
Demonstrate how to use stock market index futures contracts to change a stock portfolio’s beta.
Understand covered call and protective put strategies.
Understand the purpose and pay-offs of various option spread strategies.
Describe the ALM function of a typical commercial bank.
Understand balance sheet risks associated with funding gaps and duration gaps.
Define, compare and contrast economic capital, risk capital and regulatory capital.

What's inside

Learning objectives

Define the basis and the various sources of basic risk, and explain how basis risks arise when hedging with futures.
Define cross hedging and the minimum variance hedge ratio and hedge effectiveness.
Define and interpret the optimal number of futures contracts needed to hedge an exposure, including a “tailing the hedge” adjustment.
Demonstrate how to use stock market index futures contracts to change a stock portfolio’s beta.
Understand covered call and protective put strategies.

Understand the purpose and pay-offs of various option spread strategies.
Describe the alm function of a typical commercial bank.
Understand balance sheet risks associated with funding gaps and duration gaps.
Define, compare and contrast economic capital, risk capital and regulatory capital.

Define the basis and the various sources of basic risk, and explain how basis risks arise when hedging with futures.
Define cross hedging and the minimum variance hedge ratio and hedge effectiveness.
Define and interpret the optimal number of futures contracts needed to hedge an exposure, including a “tailing the hedge” adjustment.
Demonstrate how to use stock market index futures contracts to change a stock portfolio’s beta.
Understand covered call and protective put strategies.
Understand the purpose and pay-offs of various option spread strategies.
Describe the alm function of a typical commercial bank.
Understand balance sheet risks associated with funding gaps and duration gaps.
Define, compare and contrast economic capital, risk capital and regulatory capital.

Syllabus

Module 1: Risk Reporting

Lesson 1: Profit Distribution

Lesson 2: Risk by Risk Factor

Lesson 3: Risk Over Time

Module 2: Model Risk

Lesson 1: Sources of Model Risk

Lesson 2: VaR Back Testing

Lesson 3: VaR Exceptions

Lesson 4: VaR Exposure Monitoring

Module 3: Risk Management Tools

Lesson 1: Equity Swaps

Lesson 2: Hedging with Index Futures

Module 4: Liquidity and Operational Risk Management

Lesson 1: Liquidity

Lesson 2: Liquidity Risk

Lesson 3: Operational Risk Management

Module 5: Asset and Liability Management

Lesson 1: Interest Rate Risk

Lesson 2: Duration Gap Risk

Lesson 3: Balance Sheet Immunization

Lesson 4: Duration Gap vs Funding Gap

Lesson 5: Banking Book vs Trading Book

Lesson 6: ALM Governance

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Taught by Anton Theunissen, a renowned expert in risk management

Offers CE credits that can help learners advance their careers

Examines a broad range of risk management techniques, making it useful for both beginners and experienced professionals

Covers both fundamental and advanced concepts, providing a comprehensive foundation for risk management

Explores the use of standard hedging instruments, asset-liability management, and integrated risk management

Provides learners with the opportunity to earn a certificate from the New York Institute of Finance, a respected institution in the field

May require prior knowledge in finance and risk management concepts

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Risk Management Tools and Practices with these activities:

Review: Risk Management and Financial Institutions

Show steps

Review a classic text on risk management to deepen your understanding of the field.

View Risk Management and Financial Institutions... on Amazon

Show steps

Read and take notes on key concepts in risk management.
Summarize and discuss the main ideas with peers or colleagues.

CFA Institute Risk Management Tutorials

Show steps

Access industry-leading tutorials from the CFA Institute to enhance your knowledge of risk management practices.

Browse courses on Risk Management

Show steps

Register for a free CFA Institute account.
Search and select relevant tutorials on risk management.
Follow the tutorials and complete any accompanying assessments.

Attend Industry Conferences

Show steps

Network with professionals and gain insights into the latest risk management trends.

Browse courses on Risk Management

Show steps

Identify relevant industry conferences.
Register and attend the conferences.
Connect with speakers and attendees.
Exchange knowledge and best practices.

Five other activities

Expand to see all activities and additional details

Show all eight activities

Hedge Effectiveness Quiz

Show steps

Practice calculating hedge effectiveness to reinforce your understanding of the concept.

Show steps

Review the concept of hedge effectiveness.
Solve practice problems on calculating hedge effectiveness.

Duration Gap Analysis Exercises

Show steps

Analyze and interpret duration gaps through hands-on exercises, enhancing your understanding of risk management techniques.

Show steps

Review the concept of duration gap.
Collect data on hypothetical bank assets and liabilities.
Calculate the duration of assets and liabilities.
Analyze the duration gap and assess its implications.

Risk Management Volunteer

Show steps

Apply your risk management skills in a practical setting and contribute to the community.

Browse courses on Risk Management

Show steps

Identify nonprofit organizations or charities with risk management needs.
Contact the organizations and offer your services.
Assess and analyze their risk profiles.
Develop and implement risk management strategies.

Risk Management Presentation

Show steps

Create a comprehensive presentation that synthesizes your knowledge of risk management techniques and models.

Browse courses on Risk Management

Show steps

Identify a specific risk management topic.
Research and gather information on the chosen topic.
Develop a clear and engaging presentation structure.
Design visually appealing and informative slides.
Rehearse and deliver the presentation to peers or colleagues.

Risk Management Masterclass

Show steps

Participate in an immersive workshop to master advanced risk management techniques and models.

Browse courses on Risk Management

Show steps

Identify and register for reputable risk management workshops.
Attend the workshop and actively participate in discussions.
Apply the learned techniques to practical case studies.
Obtain a certificate of completion if offered.

Career center

Learners who complete Risk Management Tools and Practices will develop knowledge and skills that may be useful to these careers:

Financial Risk Analyst

A Financial Risk Analyst assesses an organization's susceptibility to risk and develops strategies to mitigate potential losses. This course can provide foundational knowledge and prepare you to take steps towards a career in this field.

See salaries and explore the career path for Financial Risk Analyst

Actuary

Actuaries use mathematical methods to assess the probability of future events and quantify financial risk. This course may enhance your understanding of statistical concepts and risk management techniques, which can provide a solid foundation for an actuarial career.

See salaries and explore the career path for Actuary

Quantitative Analyst

Quantitative Analysts develop mathematical models using statistical methods to analyze financial data and make predictions. The course's focus on risk management tools and techniques can equip you for this role.

See salaries and explore the career path for Quantitative Analyst

Risk Manager

A Risk Manager identifies, assesses, and mitigates financial, operational, and other types of risks within an organization. This course provides a comprehensive overview of risk management concepts and practices, providing a solid foundation for this career.

See salaries and explore the career path for Risk Manager

Investment Analyst

Investment Analysts evaluate and make recommendations on financial investments. The course's insights into risk management tools like hedging instruments and asset-liability management can complement skills needed in this role.

See salaries and explore the career path for Investment Analyst

Portfolio Manager

Portfolio Managers oversee and manage investment portfolios for clients. This course may enhance your understanding of risk management techniques and strategies, which are essential for managing portfolios.

See salaries and explore the career path for Portfolio Manager

Insurance Underwriter

Insurance Underwriters assess and evaluate insurance risks to determine the likelihood of claims and appropriate coverage. The course's focus on risk analysis and hedging techniques may prove beneficial for this role.

See salaries and explore the career path for Insurance Underwriter

Credit Risk Analyst

Credit Risk Analysts assess the likelihood that borrowers will default on their debts. The course's focus on risk assessment and management may provide valuable insights for this role.

See salaries and explore the career path for Credit Risk Analyst

Compliance Officer

Compliance Officers ensure organizations adhere to laws, regulations, and ethical standards. The course's emphasis on risk management frameworks and best practices may prove useful in understanding and implementing compliance measures.

See salaries and explore the career path for Compliance Officer

Financial Advisor

Financial Advisors provide financial advice and guidance to clients. This course may help you understand risk management principles and strategies, which can be applied to client portfolios.

See salaries and explore the career path for Financial Advisor

Operational Risk Manager

Operational Risk Managers identify, assess, and mitigate non-financial risks within an organization. The course's focus on risk management tools and practices can be valuable in this role.

See salaries and explore the career path for Operational Risk Manager

Hedge Fund Manager

Hedge Fund Managers oversee and manage hedge funds, which use advanced investment strategies. The course's focus on risk management techniques and hedging instruments may contribute to success in this role.

See salaries and explore the career path for Hedge Fund Manager

Private Equity Analyst

Private Equity Analysts evaluate and recommend investments in private companies. The course's insights into risk assessment, due diligence, and valuation may be beneficial in this role.

See salaries and explore the career path for Private Equity Analyst

Investment Banker

Investment Bankers provide financial advice and services to companies and governments. The course's coverage of risk management principles, asset-liability management, and financial instruments can provide a foundational understanding for this role.

See salaries and explore the career path for Investment Banker

Commercial Banker

Commercial Bankers provide financial services to businesses. The course's focus on risk management, financial analysis, and lending practices can be valuable in this role.

See salaries and explore the career path for Commercial Banker