BSc Financial Risk Management
Minor assessment
Academic Year 2022/2023, term 1
Percentage of Module Grade: 40%
Course: UG6003 Financial Risk Management
Lecturer(s):
Paper due: October 30th 2022
Oral Presentation: Week 6
Word count: 2000 +/-10%
Percentage of final grade given: 40% of final grade
INTENDED LEARNING OUTCOMES
1. Critically evaluate the advanced concepts and procedures of financial risk management;
2. Critically evaluate and quantify financial risk;
3. Identify and apply practical and theoretical concepts to the management of financial risk in a
business environment.
AIMS OF THE MODULE
The module aims to:
1. Provide students with an understanding of how financial and non-financial corporations can identify, quantify and manage risks.
2. Provide an understanding of how corporate management may contribute to increasing shareholder wealth.
3. Examine the characteristics of the four major derivative instruments: forwards, futures, options and swaps and consider how their value is determined and how they may be used to manage financial risk.
ASSIGNMENT DECRIPTION
Have a look at the charts below:
1) Discuss how the ECB and the FED are coping with the surge of inflation.
2) Suppose you were a fixed income trader. Choose 3 Italian Government bonds with
maturities equal to 5, 10 and 20 years respectively and compute their Duration and
Convexity. quantify the impact of the foregoing monetary policy choices on your portfolio . Do not forget to provide with a detailed overview of the relationship between bond prices and interest rate levels.
3) Discuss the impact of the monetary tightening on the EUR/USD exchange rate.
4) Suppose you were a trader, how would hedge your portfolio against FX risk using options?
Do not forget to provide with both a theoretical discussion and a quantitative realistic
example of the resulting payoff profile.
Grading:
ASSESSED COMPONENT Mark
(out of 100%)
Weighting
(as per mod.
spec)
Calculated
Mark
Individual Written Work 80%
Oral Component 20%
STRUCTURE AND FORMAT OF THE PROJECT/REPORT:
This is an individual assignment.
Make sure your writing is precise and to the point. Your paper should not exceed 2000 +/-10% words per student, excluding appendices and references.
Format of the Project/report:
1. The project/report should display a coherent structure: title page should include student name, module name, lecturer name, date and school name followed by contents page, introduction, executive summary, methodology, findings, analysis, conclusions, recommendations, referencing and appendices.
2. The project/report should be prepared as a neatly typed Word document , with double spacing and page numbering.
3. All projects/reports will be discussed in class in a power point presentation of no more than
15 minutes. The presentation should be a summary of your work.
4. Tables or work/data taken from other sources may be included in an appendix.
5. All sources must be referenced in the text and a full bibliography must be provided
in the Harvard style referencing system. Paraphrasing or direct quotes
taken from other sources must be clearly indicated with citations. No footnoting!
6. Students are reminded that depth, relevance and variety are the crucial elements of quality research.
7. Students are reminded to use valid and peer-reviewed references to support their work.
Websites should only be used if they represent an established source and only for facts and figures.
Students should make the most of academic and practitioner books and articles.
8. Submission should be by the deadline below on Turnitin.com
9. All work must conform to University regulations on Cheating, Collusion and Plagiarism’ as
described in your program handbook. You are advised to use the Harvard referencing style and avoid plagiarism.
Deadline: Midnight October 30th 2022
Assignments, must be loaded on Turnitin by midnight on October 30th 2022. Only when this has been done will the assignment be considered submitted.
Coursework must be submitted for assessment by the due date. Coursework is deemed to have been submitted once it is lodged in accordance with the assessment requirements for the module or unit.
