Teaching plan for the course unit



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General information


Course unit name: Financial Risk Management

Course unit code: 568961

Academic year: 2021-2022

Coordinator: Samer Ajour El Zein

Department: Department of Business

Credits: 5

Single program: S



Estimated learning time

Total number of hours 125


Face-to-face and/or online activities



-  Lecture with practical component




Supervised project


Independent learning




Competences to be gained during study


— Knowledge forming the basis of original thinking in the development or application of ideas, typically in a research context.


— Capacity to apply the acquired knowledge to problem-solving in new or relatively unknown environments within broader (or multidisciplinary) contexts related to the field of study.


— Ability to act professionally in the actuarial and financial field, with a considerable degree of independence.


— Capacity to classify and measure actuarial, financial and investment risks, and to take related decisions.


— Capacity to analyse, design and assess actuarial and financial products.


— Capacity to understand the specific business, legal and accounting conditions of insurance and financial entities.





Learning objectives


Referring to knowledge

— Identify different financial risks.
— Manage financial risks.
— Use suitable hedging.
— Learn about different financial risks.
— Analyse the reasons for exposure to these risks.
— Study the stages of financial risk management.
— Learn the main strategies of hedging and speculation.
— Learn how to assess costs, losses and gains due to the strategies used.


Referring to abilities, skills

— Investigate the volatility and implications of financial markets.
— Know how to analyse different financial risks.
— Know how to manage and control different types of financial risks.


Referring to attitudes, values and norms

— Develop an ethical attitude towards the management of different financial risks.



Teaching blocks


I. Derivatives and risk management

Topic 1. Introduction; Reasons and incentives for financial risk management: foreign exchange, interest, liquidity and credit risk

Topic 2. The forex market and management of foreign exchange risk

Topic 3. The law of one price and arbitrage

Topic 4. The futures market

Topic 5. Options market

Topic 6. The swap market and credit derivatives

II. Risk management in financial institutions

Topic 7. Over-the-counter markets and credit risk pooling

Topic 8. Financial institutions and risk exposure: banking and non-banking companies

Topic 9. Securitisation and shadow banking

Topic 10. Management of liquidity risk in monetary markets

Topic 11. Repo market



Teaching methods and general organization


To meet the above objectives, theoretical classes are combined with practical classes, in which students are expected to solve numerical problems. Some sessions are also dedicated to the discussion and presentation of practical cases of risk management in financial markets by students. Students’ active participation helps to achieve the objectives. Most of the material that students must read is in English, so that they become familiar with the main literature in this field.



Official assessment of learning outcomes


Continuous assessment

Continuous assessment comprises the following activities:

1) Mid-term examination on Block I. The lecturer announces the official date of the examination as early as possible. This consists of a multiple-choice test. It includes topics 1-6 of the first block (“Derivatives and risk management”) and is worth 35% of the final grade. Students who pass this examination with a mark above 4 out of 10 will not be tested on this material in the final examination.

2) Preparation, presentation and discussion of case studies. This task consists of studying some specific cases from Block II (“Risk management in financial institutions”). Students must form groups of two or three. The lecturer will recommend articles from the financial press, official reports from central banks or other supranational institutions, or academic articles published in indexed journals. Some examples are technical analyses of failures of banking institutions such as Northern Rock in the United Kingdom, the Banco Popular in Spain, or Lehman Brothers in the USA; and analyses of other non-banking institutions such as the AIG. Other articles may be on technical analyses and the risk management implications of financial innovations such as securitisations. Students, in a group and under the lecturer’s supervision, must summarise the knowledge gained from a report and prepare a presentation for discussion in class. The written report on the case study corresponds to 25% of the final grade, and the presentation is worth 10% of the grade. During the course, the lecturer will provide guidelines on how to prepare the report and the presentation. In addition, students could select any other topic of interest, which must be approved by the lecturer.

3) Final examination. It consists of open-answer questions on the theoretical content of block II of the teaching blocks. The examination is held on the official assessment date and is worth 30% of the final grade.

To pass the subject in continuous assessment mode, students must obtain an average mark of at least 5 out of 10 in the three tests described above.


Examination-based assessment

Single assessment consists of a final examination of a theoretical and practical nature on the teaching blocks of the subject. It covers the points discussed in class on topics 1-11. The final examination for students who have opted for single assessment is different from the examination for students in continuous assessment mode. The minimum grade to pass the exam is 5 points out of 10.

If required, repeat assessment consists of an examination of a theoretical and practical nature on the programme’s contents. This examination is designed for students who, regardless of the assessment mode, have obtained a mark of less than 5 out of 10.



Reading and study resources

Consulteu la disponibilitat a CERCABIB


Grima, S., & Thalassinos, E. I. (2020). Financial Derivatives: A Blessing or a Curse?. Emerald Group Publishing.

Madura, J. (2020). International financial management. Cengage Learning.- Shapiro, A. "Multinational Financial

Management", 10th Edition.Hull, J. C. (2019). Options futures and other derivatives. Pearson Education.

Rampini, A. A., Viswanathan, S., & Vuillemey, G. (2020). Risk management in financial institutions. The Journal of Finance75(2), 591-637.

Sanford Jr, C. S. (1993). Financial markets in 2020. Changing Capital Markets: Implications for Monetary Policy, 227-43.