ØABED4300 Risk Management Course description

Risk management has become an indispensable tool for the management of non-financial and financial corporations alike. This course will make students familiar with risk measurement and management techniques, their advantages and deficiencies. We will cover different sources of risks and how to measure and manage those risks, with a particular focus on financial risks and value at risk. The course will also discuss the economic rationale for risk management, the regulation of banks, and analyze the role of risk management in the last financial crisis and in connection with famous bankruptcies like Long Term Capital Management and Lehman Brothers.

In risk management, we make heavy use of derivative securities to hedge against risks. For that reason, it is recommended that the student has completed ØABED4200 Derivatives. The class is quantitative and will employ spreadsheets.

At the end of the second semester, a two page project description must be submitted and approved before the student gets a supervisor. A master's thesis preparation seminar will help the student to produce the two page project description.

A supervisor will be appointed by the programme director. Supervision is a crucial component in the preparation of the thesis. The supervisor is to assist the student when he or she is acquiring the necessary and relevant knowledge, as well as, when collecting and analysing data. The supervisor must ensure that the student-s research activity comply with accepted ethical standards within social research, including standards defined by the Norwegian Data Protection Official and the National Committees for Research Ethics in the Social Sciences and the Humanities

Every student is entitled to approximately 10 hours of face-to-face consultation, individually or in groups, or the equivalent if part of the supervision is conducted via email.

An agreement between the student and the supervisor must be signed by both parties to ensure that rights and obligations are understood. The student and the supervisor may request a substitute if either party fails to meet the obligations outlined in the agreement.

The research work (analysis of qualitative and/or quantitative data or a literature review) is conducted during the fourth semester. Norwegian students are encouraged to carry out their data collection abroad. International students often collect their data in their home countries.

None.

After completing the course, the student should have the following overall learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The student has

• a broad overview of different sources of risks and how they affect the cashflows and the value of the corporation
• knowledge about how to quantify those risks with popular risk measures
• knowledge of how to mitigate or eliminate the risk exposure with standard derivative contracts
• understanding of when risk management adds value to a corporation

Skills

The student can

• identify different sources of risks and quantify a corporation's exposure to them
• apply different estimation techniques to deal with the time-varying riskiness of financial time series
• calculate the impact of different risks using popular risk measures, e.g., Value-at-Risk, for individual positions and for entire portfolios or the entire corporation
• employ appropriate financial instruments to mitigate or eliminate the impact of the different sources of risks

General competence

The student

• is able to quantify and manage the risk of a corporation
• has a critical understanding of the limitations of the various techniques discussed in the course

The course is taught in class/zoom/recorded lectures and students work on and discuss different assignments in groups and plenary sessions.

The following coursework requirements must have been approved in order for the student to take the exam:

• Coursework 1: Students have to do three to four assignments related to the material taught in class in groups of up to five people. Each assignment has a maximum amount of 10 pages. The assignments comprise exercises, short case studies, and small empirical analyses to deepen the understanding of the theories and apply them to real-world problems. The data projects can be carried out in Excel.

All required coursework must be completed and approved by the given deadline in order for the student to take the exam. If one or more coursework requirements have not been approved, the student will be given one opportunity to submit an improved version by a given deadline.

The exam in the course is a supervised exam of 4 hours.

The student submits a thesis that investigates a research question using one or several relevant research methodologies.

All other courses within the master's degree must be passed before submitting the master's thesis.

A student who has completed his or her qualification has the following learning outcomes defined in terms of knowledge, skills and general competence:

Knowledge

The student has advanced knowledge of

• research designs relevant to the investigation of a particular research question
• a particular area of social or health policy of relevance to their degree
• relevant research literature on the subject matter of the master-s thesis
• theories and methodological approaches relevant for the chosen subject matter
• basic conceptual tools needed to understand an critically examine relevant social or health research

Skills

The student can

• conduct a review of the state of scientific knowledge related to a research question in social and health policy
• conduct a limited, independent research project under supervision
• choose a methodology that is relevant for a specific health and social welfare research question
• apply research methods in a reflective manner
• critically evaluate relevant quantitative or qualitative methods used in reports, books or articles investigating a particular social welfare or health policy problem

General Competence

The student can

• read and critically assess academic literature
• present specialised knowledge and research findings in the form of academic writing
• apply advanced skills and knowledge in the field of social welfare and health policy
• evaluate issues related to the academic, professional and research ethics