RISK PLANNING AND BUSINESS CRISIS MANAGEMENT

The course aims at providing the theoretical support and the practical instrument to identify, measure and manage financial risks in corporations.The risk management process is analysed within the overall corporate strategies and not in isolation. The specific risks analysed are interest rate, exchange rate, and commodity price risk.

Objective of the course is providing the ability of identify, measure and manage corporate financial risks such as interest rate, exchange rate, and commodity price risk. Within each type of risk, the students are trained to analyse if and when the hedging of that risk creates value for the corporation or project, and therefore select the best hedging strategy given the overall corporate strategy. The course will benefit from the intervention of professional figures such as Chief Financial Officers or Financial Directors, that will present practical cases and stimulate the discussion.

1. Risk budgeting for financial risks in corporation
2. The reasons for hedging
3. Measurement of financial risks
4. Hedging strategies with derivatives: futures, swaps, options
5. Hedging risks in practice: talks with practitioners

Slides and exercises presented in class and provided by the teacher on moodle

Text books for further reading:
• on the role of risk management in coporation:
Grinblatt-Titman, Financial Markets and Corporate Strategy, McGraw-Hill (Part VI)
Eiteman, Stonehill, Moffett, Multinational Business Finance, Addison Wesley
• on financial derivatives:
Bodie-Kane-Markus, Investments, McGraw-Hill
Hull, Options, Futures and other derivatives, Pearson

Written exam, consisting in numerical exercises and multiple-choice questions aimed at testing the ability to understand and solve practical cases on risk management.

Italian

written