What Will I Learn?
- define risk management;
- describe features of a risk management framework;
- define risk governance and describe elements of effective risk governance
- explain how risk tolerance affects risk management
- describe risk budgeting and its role in risk governance
- identify financial and non-financial sources of risk and describe how they may interact
- describe methods for measuring and modifying risk exposures and factors to consider in choosing among the methods.
Risk—and risk management—is an inescapable part of economic activity. People generally manage their affairs in order to be as happy and secure as their environment and resources will allow. But regardless of how carefully these affairs are managed, there is risk because the outcome, whether good or bad, is seldom predictable with complete certainty.
There is risk inherent in nearly everything we do, but this course will focus on economic and financial risk, particularly as it relates to investment management.
The questions that this course will address include the following:
- What is risk management, and why is it important?
- What risks does an organization (or individual) face in pursuing its objectives?
- How are an entity’s goals affected by risk, and how does it make risk management decisions to produce better results?
- How does risk governance guide the risk management process and risk budgeting to integrate an organization’s goals with its activities?
- How does an organization measure and evaluate the risks it faces, and what tools does it have to address these risks?
This course is organized in five sections, the first section gives an Introduction to the concept of Risk Management, Section 2 describes the risk management process, and Section 3 discusses risk governance and risk tolerance. Section 4 covers the identification of various risks, and Section 5 addresses the measurement and management of risks.
Who is the target audience?
- This course is ideal for a person seeking an introduction to Risk Management: Economic and Financial Risk
- Students appearing in CFA L1 exam for a second time must take this course as it is an addition in the 2016 curriculum
- Students enrolled for my Portfolio Management course do not need to take this as it has been embedded in that course
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