Learning objectives
The first and second module of the course thus aims to examine both the main risk factors, and the techniques required for their management. The analysis is developed with reference to the following risks: interest rate risk, exchange rate risk and commodity risk.
At the end of the course, students will have acquired: the knowledge necessary to understand the main pure and financial risks to which a non-financial company may be exposed, as well as the techniques necessary for proper risk management; the ability to apply the knowledge acquired in order to successfully carry out exercises and business cases relating to the management of financial risks that will be addressed in the second module of the course; the critical ability (autonomy of judgment) to independently assess the issues related to the exposure and coverage of financial risks for non-financial companies on the one hand, and the issues related to exposure to pure risks on the other; the skills consisting in using an appropriate technical language in communicating with financial directors, treasurers and corporate consultants with reference to issues related to the management of financial risks and in communicating with the internal control structures for the identification, assessment and management of pure risks ; the ability to learn through the logical method of identifying problems and critical analysis of the solutions adopted, as well as the ability to work in a team.
At the end of the third module, students should have developed the
following skills:
a) Knowledge and understanding: An objective of the course is to know
how the ownership of companies is taken in the practice of the
financial markets of developed countries and, in particular, in the Italian
context. We will examine the rules by which the ownership rights are
exercised by the shareholders and other rules that influences
the governance of the company by the lenders.
b) Ability to apply knowledge and understanding: The course aims to
illustrate, show the application and evaluate the effects of the provisions
and tools of governance, management incentives, resistance to takeover,
etc.
c) Independent judgment: The course seeks to contribute to the
development of a critical attitude on the issue of corporate governance,
on the role of banks and financial markets in the management and
control of companies as well as on the peculiarities of governance in
banks.
d) Communication skills: The course aims to train people able to interact
with entrepreneurs, banks, management and business consultants with
regard to corporate governance and value creation issues.
e) Ability to learn: The course essentially aims to provide student with the
main elements to allow them to develp, implement and evaluate business
choices with a view to creating value for all stakeholders
Prerequisites
NO
Course unit content
MOD. 1
• Risk management
• Enterprice risk management models
• The internal control system
• The pure risks
- Reputational risk
- Sustainability and taxonomy
- Operational risk
• Risks arising from international business
• Multinational companies and analysis of the international competitive environment
• The internationalization of businesses
• The country risk
• Other risks associated with international trade
• The management of contractual and transport risks
• The management of country and counterparty risks
• The foreign exchange and the foreign exchange market
• Settlement exposure to exchange rate risk
• Operational exposure to exchange rate risk
• The tools for managing the exchange rate risk
• The assessment, measurement and management of interest rate risk.
• The tools for managing interest rate risk.
MOD. 2
• Identification, measurement and management of interest rate risk
• Interest rate exposure in non-financial firms: variables, control instruments and management
• Instruments for the management of interest rate risk
• Exercises and case studies on issues related to exposure and hedging of interest rate risk.
• Oil futures and oil derivative futures: description and purposes
• Exercises and case studies on issues related to exposure and hedging of oil price risk.
MOD. 3
Financial markets and intermediaries contribute to determine the enterprise governance solutions.
People having rights included in company liabilities can strongly influence significant decisions regarding corporate strategy, the choice of management and other important topics. The financial market is the place where the corporate ownership is disputed, and where corporate governance changes are defined.
Full programme
MOD. 1
• Risk management
• Enterprice risk management models
• The internal control system
• The pure risks
- Reputational risk
- Sustainability and taxonomy
- Operational risk
• Risks arising from international business
• Multinational companies and analysis of the international competitive environment
• The internationalization of businesses
• The country risk
• Other risks associated with international trade
• The management of contractual and transport risks
• The management of country and counterparty risks
• The foreign exchange and the foreign exchange market
• Settlement exposure to exchange rate risk
• Operational exposure to exchange rate risk
• The tools for managing the exchange rate risk
• The assessment, measurement and management of interest rate risk.
• The tools for managing interest rate risk.
MOD. 2
• Identification, measurement and management of interest rate risk
• Interest rate exposure in non-financial firms: variables, control instruments and management
• Instruments for the management of interest rate risk
• Exercises and case studies on issues related to exposure and hedging of interest rate risk.
• Oil futures and oil derivative futures: description and purposes
• Exercises and case studies on issues related to exposure and hedging of oil price risk.
MOD. 3
Financial markets and intermediaries contribute to determine the enterprise governance solutions.
People having rights included in company liabilities can strongly influence significant decisions regarding corporate strategy, the choice of management and other important topics. The financial market is the place where the corporate ownership is disputed, and where corporate governance changes are defined.
Bibliography
MOD.1
- McGrawh Hill Create Book
- Options, Futures, and Other Derivatives, J. Hull, Pearson
MOD. 2
- Options, Futures, and Other Derivatives, J. Hull, Pearson
- Case studies and exercises distributed in the classroom by the teacher.
MOD. 3
Work in progress
Teaching methods
MOD. 1
• Knowledge and understanding: lectures
• Applying knowledge and understanding: exercises
• Making judgments: during this module, students will be encouraged to identify strengths and weaknesses of financial derivatives
• Learning skills: for each topic the main problem to be solved will be introduced, and then the solutions adopted will be critically analyzed
• Communication skills: the teacher will illustrate
the meaning of the most common terms used by the financial community.
MOD. 2
• Knowledge and understanding: lectures
• Applying knowledge and understanding: exercises
• Making judgments: during this module, students will be encouraged to identify the optimal solutions to adopt for a proper management of financial risks
• Learning skills: for each topic the main problem to be solved will be introduced, and then the adopted solutions will be critically analyzing
• Communication skills: the teacher will illustrate
the meaning of the most common terms used by the financial community.
MOD. 3
Acquisition of knowledge: lectures.
Acquisition of the ability to apply knowledge: case studies and exercises.
Acquisition of independent judgment: during this course, students will be encouraged to identify strengths and weaknesses of different models and solutions.
Acquisition of learning skills: each topic will be addressed first, explaining the problem to be solved, and then critically analyzing the possible solutions.
Acquisition of technical language: the teacher will illustrate the meaning of the most common terms used by the financial community.
Assessment methods and criteria
Written test.
Partial tests are possibile.
The written Examination will be of 1-hour and 30-minute duration
The exam will be composed as follows:
MOD1: Knowledge will be assessed with 5 multiple choice questions to which 1 point will be awarded for each correct answer
The ability to apply knowledge will be assessed with 1 exercise to which 5 points will be assigned
The ability to communicate with appropriate technical language will be assessed with 2 multiple choice questions to which 1 point will be awarded each
The autonomy of judgment and the ability to learn will be ascertained with a semi-open question which will be awarded a score of 5.5 points
MOD2:
The final score for the II module of governance and risk management teaching is 5/30 and will be calculated according to the following method:
The knowledge and the ability to communicate with appropriate technical language will be assessed with 1 closed question which will be evaluated 1 point
The ability to apply knowledge will be assessed with 1 exercise that will be evaluated up to 4 points;
MOD3.
For the third module, the final score of the course is equal to 7.5 / 30 points and will be calculated in this way: knowledge, the ability to communicate with technical language and autonomy of judgment will be evaluated through an open question of 5 points. Knowledges and the ability to apply knowledge will also be assessed with one or more multiple choice demands to which 2.5 points will be awarded.
Honors will be awarded to those particularly deserving students who, in addition to having complied with the necessary requirements to obtain the full evaluation, in carrying out the test have overall demonstrated an appreciable systematic knowledge of the subject, an excellent ability to apply the knowledge acquired to the specific problem in question, a significant autonomy of judgment, as well as particular care in the formal drafting of the paper.
Examination results will be published on ESSE3 and students can look at their papers by making an appointment with the professor.
Other information
NO
