Investment Risk Management

Description

• 📘 Course Title:

  Investment Risk Management

  📅 Duration:

  6–8 Weeks (adjustable for intensive or semester-based learning)

  🎯 Target Audience:

  • Finance professionals

  • Portfolio managers

  • Risk analysts

  • CFA/FRM candidates

  • Advanced finance students

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  🔹 Module 1: Introduction to Investment Risk

  Topics:

  • What is risk? Types of risk in investing

  • Systematic vs. unsystematic risk

  • Risk-return tradeoff

  • Historical perspective on financial crises

  Outcomes:

  • Understand core investment risks

  • Recognize the impact of risk on portfolio performance

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  🔹 Module 2: Measuring Investment Risk

  Topics:

  • Volatility and standard deviation

  • Value at Risk (VaR) – historical, parametric, Monte Carlo

  • Beta and correlation

  • Maximum drawdown

  Hands-On Activities:

  • Calculate portfolio volatility and VaR using Excel or Python

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  🔹 Module 3: Market and Credit Risk

  Topics:

  • Market risk sources (equity, interest rate, FX, commodity)

  • Stress testing and scenario analysis

  • Credit risk: credit ratings, default probability

  • Credit Value at Risk (Credit VaR)

  Case Study:

  • Market crash impact simulation on diversified portfolios

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  🔹 Module 4: Liquidity and Operational Risk

  Topics:

  • Liquidity risk indicators

  • Bid-ask spread and market depth

  • Operational risks: internal processes, fraud, cyber risks

  • Risk control frameworks (e.g., COSO, Basel)

  Hands-On Exercise:

  • Liquidity stress test using real market data

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  🔹 Module 5: Portfolio Risk Management Tools and Techniques

  Topics:

  • Diversification and asset allocation

  • Modern Portfolio Theory (MPT) and Efficient Frontier

  • Risk budgeting and risk parity

  • Hedging strategies (options, futures, swaps)

  Simulation:

  • Construct and rebalance a diversified portfolio using risk-based weights

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  🔹 Module 6: Regulatory and Institutional Risk Frameworks

  Topics:

  • Basel III and Solvency II

  • Risk-based capital requirements

  • Role of regulatory bodies (SEC, RBI, ESMA, etc.)

  • Risk management policies in asset management firms

  Discussion:

  • Review and critique real-world risk policies from top investment firms

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  🔹 Module 7: Behavioral Risk and Emerging Risks

  Topics:

  • Behavioral biases in risk perception

  • Herding, overconfidence, loss aversion

  • Geopolitical, ESG, and climate-related risks

  • AI/tech risks in modern finance

  Interactive Activity:

  • Behavioral finance simulation or case-based quiz

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  🔹 Module 8: Enterprise Risk Management (ERM) in Investments

  Topics:

  • Integrating ERM into investment processes

  • Key Risk Indicators (KRIs)

  • Scenario analysis and reporting

  • Risk dashboards and governance structures

  Project:

  • Create a mock ERM risk report for a sample investment fund

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  🔹 Capstone Project

  Project Idea:
  Design a risk management framework for a hypothetical multi-asset portfolio (including measurement, monitoring, and mitigation strategies).

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  📜 Certification & Evaluation

  • Weekly quizzes and case reviews

  • Hands-on Excel/Python modeling tasks

  • Capstone project submission and presentation

  • Completion certificate (with merit badges for technical skill usage)