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Financial risk management Overview
Financial risk management is a procedure that involves organizations setting up rules to characterize their strategy on tolerating financial risk. People who work in financial risk management don’t settle on venture choices for an organization. Rather, those people make the rules that the risktakers must take after while breaking down ventures they are thinking about for the organization.
About Our Company
Financial risk management is the practice of economic value in a firm by using financial instruments to manage exposure to risk: Operational risk, credit risk and market risk, Foreign exchange risk, Shape risk, Volatility risk, Liquidity risk, Inflation risk, Business risk, Legal risk, Reputational risk, Sector risk …
What are the Course Objectives
The main risks arising from our financial instruments are liquidity risk, foreign exchange risk, interest rate risk and credit risk. The importance of managing those risks has significantly increased in light of the considerable change and volatility in both the Philippine and international financial markets.
Benefits from the Course
 SAFER BUSINESS GROWTH
 THOROUGH CUSTOMER INSIGHTS
 OPTIMIZED FINANCIAL RISK MANAGEMENT
 BETTER BORROWING AND BANK FINANCING OPTIONS
CHAPTER 1 : Introduction to Financial Mathematics

 Introduction to Financial Calculus
 Variables – Discrete and Continuous
 Univar ate and Multivariate Functions – Dependent variable and independent variable
 Physical representation of a function
 Linear and NonLinear Functions
 Limits of a function
 The number e and Natural Logarithm
 Differential Calculus – Differentiation, Interpretation – Slope of a tangent, using derivatives to calculate function values and deltas. Linear functions 1st order derivative. Nonlinear functions – 1st and higher order derivatives, interpretations, and usage. Rules of derivatives.
 Functions – Differentiation and Taylor Series Expansion
 Introduction to Partial Derivatives
 Introduction to Integral Calculus
CHAPTER 3 : Introduction to Financial Statistics

 Introduction to Financial Statistics
 Frequency distributions
 Measures of Central Tendency/Location (Mean/Mode/Median)
 Dispersion, Measures of Dispersion
(Variance/SD/Quartiles/Percentiles/Ranges) and its relevance to Risk Management
 Correlations
 Introduction to Probability Theory
 Random variables
 Probability and its uses
 Probability Rules
 Conditional Probabilities
 Probability Distributions (Single Variable)
 Continuous Time/Discreet Time; Continuous Value/ Discreet Value
 Probability Mass Function
CHAPTER 5 :Quantitative Analysis
 Discrete and continuous probability distributions
 Estimating the parameters of distributions
 Population and sample statistics
 Bayesian analysis
 Statistical inference and hypothesis testing
 Correlations and copulas
 Estimating correlation and volatility using EWMA and GARCh models
 Volatility term structures
 Linear regression with single and multiple regressors
 Time series analysis
 Simulation methods
CHAPTER 7 :Financial Markets and Products
 Structure and mechanics of OTC and exchange markets
 Structure, mechanics, and valuation of forwards, futures, swaps and options
 Hedging with derivatives
 Interest rates and measures of interest rate sensitivity
 Foreign exchange risk
 Corporate bonds
 Mortgagebacked securities
 Rating agencies
CHAPTER 9 :Market Risk Measurement and Management
 VaR and other risk measures
 Parametric and nonparametric methods of estimation
 VaR mapping
 Back testing VaR
 Expected Shortfall (ES) and other coherent risk measures
 Modeling dependence: Correlations and copulas
 Term structure models of interest rates
 Discount rate selection
 Volatility: Smiles and term structures
CHAPTER 11 :Operational and Integrated Risk Management
 Principles for sound operational risk management
 Enterprise Risk Management (ERM)
 Risk appetite frameworks and IT infrastructure
 Information risk and data quality management
 Internal and external operational loss data
 Modeling operational loss distributions
 Extreme value theory (EVT)
 Validating models
 Benchmarking models
 Model risk
 Riskadjusted return on capital (RAROC)
 Economic capital frameworks and capital allocation
 Liquidity risk:
 Failure mechanics of dealer banks
 Stress testing banks
 Outsourcing Risk
 Regulation and the Basel Accords
CHAPTER 13 :Current Issues In Financial Markets
 Bitcoin and virtual currencies
 Market and funding liquidity
 Algorithmic trading and fixed income market algorithmic trading
 Negative policy rates
 Emerging economies and corporate debt
CHAPTER : 2 Introduction to Bond Mathematics

 Finance and the Time Value of Money
 Concept of Zero Coupon (Discount) Bonds and Coupon Bonds.
 Bond Characteristics
 Bond Types – Fixed Rate, Floating Rate, Inverse Floater Rate, etc.
 Interest Rates – Discrete and Continuous Compounding
 Bond Pricing – using ZCYC or YTMC with discrete compounding or continuous compounding
 Difference between bond coupon rate and bond yield
 Calculating Bond Yield (YTM, CY, MMY, ZCY/Spot, Par Yield, etc.)
 Price Yield Relationship
CHAPTER 4 : Probability Density Function
 Cumulative Distribution Function
 Applications and relevance in Risk Management
 Mathematical Expectation
 Moments of Distribution (Mean, Variance, Skewness, Kurtosis), Central Moments, Standardized Moments
CHAPTER 6: Foundations of Risk Management
 Basic risk types, measurement and management tools
 Creating value with risk management
 The role of risk management in corporate governance
 Enterprise Risk Management (ERM)
 Financial disasters and risk management failures
 The Capital Asset Pricing Model (CAPM)
 Riskadjusted performance measurement
 Multifactor models
 Data aggregation and risk reporting
 Ethics and the GARP Code of Conduct
CHAPTER 8: Valuation and Risk Modelling
 ValueatRisk (VaR)
 Expected Shortfall (ES)
 Stress testing and scenario analysis
 Option valuation
 Fixed income valuation
 Hedging
 Country and sovereign risk models and management
 External and internal credit ratings
 Expected and unexpected losses
 Operational risk
CHAPTER 10: Credit Risk Measurement and Management
 Credit analysis
 Default risk: Quantitative methodologies
 Expected and unexpected loss
 Credit VaR
 Counterparty risk
 Credit derivatives
 Structured finance and securitization
CHAPTER 12: Risk Management and Investment Management
 Portfolio construction
 Portfolio risk measures
 Risk budgeting
 Risk monitoring and performance measurement
 Portfoliobased performance analysis
 Hedge funds
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Affordable Prices
Flexible Timings
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