Course Information
Introduction and Background

It has become increasingly important to understand the intricacies of risk analysis and risk management applied to finance. This is equally true for private sector corporate actors, public sector officials and professionals working in private financial institutions and in public administrations such as ministries of finance and central banks. In fact, any activity that involves treasury operations is exposed to financial risks.

Consequently, risk management is important to any actor managing financial resources, either investing in the stock market, lending or borrowing capital through loans. Risk management tools are geared to limiting the financial risk involved in a financial commitment in order to reduce cost of capital. If risk is managed poorly or not at all, there is a chance that no creditor will be willing to lend, as creditors use several sophisticated mathematical tools to decide which loans, deals and/or investments are less risky and thus safer for them. The same is true for an actor's ability to attract investors, as major investors, especially institutional investors, increasingly rely on credit ratings from major agencies to decide where to invest their money. In addition, risk management is essential to maintaining a sustainable debt portfolio and avoiding financial crisis for sovereign countries as well as bankruptcy for corporations.

Measuring risk using mathematical formulae has become standard for major financial institutions world-wide, and the cost of borrowing or leveraging debt, to a large extent, depends upon the findings of risk and creditworthiness found through mathematical modelling and applying sophisticated statistical tools.

Registration Status: OPEN
Deadline for Enrollment: when slots are full
Course Dates: November 1 to December 17, 2010
Estimated learning time: Minimum of 35 hours
Format: Online/Internet-based (asynchronous)
Language of Instruction: English
Fees: US $ 400/-
Helpline: UNITAR Geneva (Course Administration and Technical Questions)
Course Drafter and Director Dr. Enrique Cosio-Pascal
  Course Objectives  

This course is oriented to government officials that work in matters related to public finance risk management, either within the Treasury, Budget or Public Debt Management Office. This course would also be of interest to central banks officials. It assumes that the trainee has already some background on public debt management or public financial management. The course provides all the basic elements in mathematics and statistics for the e-Students to understand all the necessary tools related to advance risk management.

  Target Audience  

This course is oriented toward those economists and financial specialists that would be dealing with financial risk management issues, in the first place, however, this course may be interesting for all professionals dealing with treasury operations and to persons belonging to the academia that would be interested on financial risk management issues, because it is a basic summary of the present tools in use in order to cope with financial risks.

  Expected Course Outcomes

At the end of the course, the participants should have knowledge of:

  • The basic mathematical and statistical tools to cope with risk management concepts.
  • A large overview of the application of different financial risk management techniques.
  • The basic theoretical knowledge to cope with finance risk management decisions.
  • How plan and undertake a basic finance risk management strategy.
  Course Structure / Outline  

Course Structure

The course is organised into five weeks: the first week is devoted to a review of concepts in statistics and mathematics, especially matrix algebra, as well as of mathematics of finance; the second week is devoted to the review of traded instruments, debt and equities, as well as to the typology of risk; the third week to risk indicators and risk modelling; the fourth week is devoted to tools used to decrease risk and Asset-Liability Management; finally, the last week is devoted to risk measurement and strategies.

Each week corresponds to a module that may contain several lessons on different issues of debt management, there would be a text drafted by the author of the course and complementary readings propose to the e-Students to read. Once the e-Student feels confident, he/she can take a quiz on the corresponding module. In addition to the quizzes, there would be a weekly subject for discussion and analysis in which the e-Students have to participate.

Course Outline

This course will comprise of the following modules:

    • Statistics
      • Probability Densities
      • Statistical Parameters used in Risk Management
      • Theoretical Distributions that are used to Analyse Risk
      • Statistical Tools that are used in Risk Analyses
    • Matrix Algebra
      • Basic Concepts
      • Matrix Multiplications
    • Mathematics of Finance
      • Basic Concepts for Risk Management

    • Traded Instruments.
      • Debt Instruments
      • Equities
    • Overview of Risk Management
      • Typology of Risks
      • The Aim of Risk Management

    • Risk Indicators
      • Market Risk Indicators
      • Rollover Risk
      • Liquidity Risk
    • Risk Management Tools
      • Risk Modelling
      • Risk Management and Statistical Tools

    • Tools for decreasing risk
      • Forward Agreements
      • Swaps
    • Introduction to Asset-Liability Management
      • Interest Rate Risk and Liquidity Risk
      • The Asset-Liability Management Committee (ALCO)
      • GAP Analysis

    • External Information Sources
      • Risk Measurement and External Information: Credit Rating Agencies
      • External Controls: Addressing Operational Risk
    • Management of Different Typology of Risks
      • Management of Market Risk
      • Management of Liquidity Risk
      • Management of Credit Risk
    • Trends in Risk Management
      • The Spread of Risk Management
  Other Course-related Information
It has to be noted that it is compulsory to take successfully the quizzes (80 percent correct answers) as well as the participation in the five weekly case studies for e-Students to solve, which will be graded also on the basis of 100 points each, in order to obtain the UNITAR e-Learning Certificate. The total average required on the five quizzes and the five study cases should be not less than 80 percent. However, there will be a sixth week in order for the e-Students to catch up with the course quizzes and case studies. Notwithstanding, this sixth week is not intended to start taking quizzes or/and start solving the different weekly study cases, but really to catch up on previous work.

This course is designed as an online course in which participants will be primarily responsible for their own learning. Each lesson will consist of the following components:

1) Basic Reading Materials (Compulsory Reading Materials): these materials are intended to educate the participants about the basic concepts and principles applicable to the subject-matter of the lesson. It will include, where appropriate, sample materials. These materials will constitute the required reading materials for the lesson

2) Advanced Reading Materials (Optional Reading Materials): this will consist of optional reading materials for participants who wish to learn more about the topic than what is covered in the lesson.

3) External Links: This will refer the interested participants to additional books, articles, documents, and websites that deal with the issues raised in the lesson.

4) Glossary: A glossary of terms tailored to the online course will be provided to the participants and act as a learning support during the entire course.

5) Quizzes and Case Studies: At the end of each module there will be a quiz and a case study. The quizzes and the case studies are designated to test the participant's understanding of the module. Participants are required to pass each quiz and obtain at least 80% or more passing grade. Participants are required to solve each study case and submit it to the course director for evaluation, which requires at least 80% or more passing grade. Participants obtaining passing grades of 80% or more in both quizzes and case studies are eligible for the certificate.

6) Community Discussion Board: There will be a community discussion board available on which participants can post questions or comments that can be seen by the instructor and the other participants. This discussion board will be moderated by the course director and UNITAR. Structured discussion strings will be posted on a weekly basis.

All successful participants will be eligible to a certificate after completion of this online course.


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