Skip to Main Content
Sign In

Risk Management and Financial Decision Making (VT IFS)

Risk Management and Financial Decision Making (VT IFS)

Study Programmes
Bachelor's degree programme in Business Administration
Project Description
Risk Management and Derivatives:
  • Financial risk management
  • Financial derivatives
  • Use of derivatives in financial risk management

Decision Theory:
  • Expected utility theory
  • Mean-variance theory
  • Prospect theory
  • Non-cooperative game theory
  • Asymmetric information
  • Market efficiency
  • Behavioral biases
Learning Outcomes The students...
Professional Competence
  • understand the most important concepts of financial risk
  • know why and where financial risks matter
  • understand the logic of the risk management process
  • know the standard types of financial derivatives and assumptions behind their valuation
  • describe pros and cons of different types of derivatives
  • know the most prominent decision theories
  • understand how rational solutions may be achieved by using classical decision models
  • understand the differences between decision under certainty, risk and ignorance
  • know different levels of market efficiency and their implications
  • understand how information is processed on financial markets
  • solve decision problems by using DT models and methods.
  • find the strategic aspect of a problem and transform it into a simplified problem.
  • can explain non-cooperative game theory
  • analyze decision situations.
  • evaluate Investments with EUT, MV and PT, explain and interpret the assumptions of these methods.
Methodological Competence
  • select and apply methods for identifying risks
  • select and apply methods for measuring risks
  • select and apply methods for managing risks
  • devise suitable hedging strategies using derivatives
  • select methods for risk communication
  • know methods in decision theory
  • know key concepts of experimental research approaches to test market and trader behavior
  • use methods and models on unknown decision situations.
  • calculate optimal solutions and equilibria
  • compare different methods for measuring and controlling risk and uncertainty in decision processes
  • evaluate decision methods in mini cases and find appropriate models for solving typical problems
  • are able to identify Nash Equilibria in simple Prisoner's Dilemma settings
Social Competence
  • pitch solutions to fellow students
  • argue in favor of and against candidate solutions
  • defend their stance in discussions
  • understand and critically discuss the arguments of fellow students.
Personal Competence
  • repeat the contents of lectures and exercises in a self-organized way
  • assess their own learning progress during lectures
  • identify their own strengths and weaknesses
  • tolerate different opinions and working styles
  • listen carefully, read and repeat, practice until they understand the logic and mathematics behind models
  • work together and motivate other students who tend to give up as a reaction to the difficulty of mathematical problems
Technology Competence
  • use standard software for valuing financial derivatives
Requirements (formal)
Enrollment from WS23/24
These admission requirements:
  • To register for modules in the specialization, the modules Statistics, Business Mathematics, and English I must have been successfully completed.
  • In addition, the module Finance must be successfully completed in order to register for the IFS specialization.

Enrollment before WS23/24
Either the above admission requirements or:
  • To register for modules in the fifth semester, all modules from the first year of study must be successfully completed.
  • Elective courses are not taken into account for these regulations.
Module number:
6210806
Semester:
WS 26/27
ECTS Credits:
6
Courses:
56 L / 42 h
Self-study:
138 h
Scheduled Semester:
5