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Risk Management Using Derivatives
It is essential for financial managers to identify risks accurately and to use the right control techniques. This course begins by introducing the different types of risk, and explains how to use the risk cycle to recognize these risks and control them. The course then moves on to the different types of derivative techniques that can be used to manage risk, including FX risk, short- and long-dated domestic interest rate risk, long-dated foreign interest rate risk, and equity risk. In the final lesson, participants are presented with several case studies that apply what they've learned about using derivatives to manage risk.
CPE Credits: 7 - The complete list of CPE courses can be found here .
Program Details (NASBA) View
Program Level
Intermediate
Prerequisites
Derivative Instruments or equivalent level of knowledge
Advance Preparation
No advance preparation required
Recent Revision Date
September 5, 2014
Instructional Delivery Method
QAS Self Study
Field of Study
Management Advisory Services
Duration : 1 hour
Understanding risk management
How risks arise
Risk categories
Duration : 1 hour
Understanding and implementing the risk
Types of risk
Defining and utilizing natural hedging
Duration : 1 hour
Defining foreign exchange risk
Applying derivative risk management techniques
Duration : 1 hour
Defining short-dated domestic interest rate risk
Applying derivative risk management techniques
Duration : 1 hour
Defining long-dated domestic interest rate risk
Applying derivative risk management techniques
Duration : 1 hour
Defining long-dated foreign interest rate risk
Applying derivative risk management techniques
Duration : 1 hour
Defining equity risk
Applying derivative risk management techniques
Identify the different categories of risk. Recognize how risks arise. Recognize the elements of the risk cycle Identify the different types of risk (translation, transaction, contingent, and external risks) Explain the Quantification, Policy, Implementation and Monitoring steps of the Risk Cycle Describe the benefits of internal hedging Recognize applications for forward foreign exchange contracts to manage FX risk Identify the use of non-deliverable forward foreign exchange contracts in the management of FX risk Recognize the use of currency options in the management of FX risk Identify the use of forward interest rate agreements (FRA's) to manage risk. Recognize exchange traded futures as they are used to manage risk. Recognize management of risk using interest rate options. Discuss the use of interest rate swaps in managing long-dated domestic interest rate risk. Recognize the use of swaptions in managing long-dated domestic interest rate risk. Recognize long-dated foreign interest rate risk exposure. Identify how to use a currency swap to manage long-dated foreign interest rate risk. Define equity risk and beta. Explain the role of stock index futures in managing equity risk. Apply derivative techniques to manage translation risk. Identify elements of transaction risk and how best to manage it using derivatives. Recognize strategies for managing contingent risk using derivatives.
Risk managers and assistants, trading assistants, finance professionals, auditors and controllers.
