Course Description and Objectives:

The course is designed to introduce the students to analyze risks facing modern financial institutions and tools that financial institutions use to manage various risks in a rapid changing financial environment.

The course focuses on managing return and risk in modern financial institutions. The central theme is that the risks faced by financial institutions managers, and the methods and markets through which these risks are managed are becoming increasingly similar, no matter whether an institution is a commercial bank, a savings bank, an investment bank, or an insurance company.

On completion of this course, students should be able to:
 Understand different sources of risks facing modern financial institutions; including interest rate risk, liquidity risk, credit risk and market risk, etc.;
 Comprehend various risk models used to measure and analyze different risks;
 Grasp different tools that financial institutions use to manage risks.

Number of Credits: 3

Recommended textbook:

Financial Institutions Management: A Risk Management Approach, 6th edition by Saunders and Cornett, published by McGraw Hill. [...more]

Other Course Materials:

Financial calculator: You may need a financial calculator to solve exam problems. I recommend that you use Texas Instrument BAII plus. Homework and exercises can be done by Excel spreadsheet.

Grading scale:

Midterm exam 100 points
Quizzes 100 points
Final exam 100 points
Total 300 points

Letter Grade Percentage
A 93.0%
A- 90.0%
B+ 87.5%
B 82.5%
B- 80.0%
C+ 77.5%
C 70.0%
D 60.0%
F 50.0%

Quizzes: There will be in-class quizzes. The quiz with the lowest grade will be dropped in the calculation of the final grade. If you fail to take any quiz, a score of zero will be assigned for that quiz. No make-up quizzes will be given for any reason.

Homework: End-of-chapter problems will be assigned during class but not collected. However, students will be randomly selected to solve the problems in class.

Preparation for the class: Please read the materials ahead and print the PowerPoint slides before each class for note taking.

Participation: Active participation is expected. From time to time, students will be asked to answer questions, solve assignment problems, and have group discussions in class.
Classroom Policies: violations of these policies may lead to deductions of your final grade
(i) Always bring your textbook and a Calculator to the class,
(ii) All students must reach the class on time,
(iii) Always shut down or silent your cell phone during class time,
(iv) No text messaging or playing with the cell phone during class time,
(v) No discussions unrelated to the course materials during class time,
(vi) Any student disrupting the class may be asked to leave the room immediately,
(vii) All students are expected to stay in the classroom for the duration of the lecture.

Academic Integrity:

Violations of academic integrity are unacceptable. Please do not put yourself in that position. Know and follow the rules and please ask if clarification is needed. Penalties for violations of academic integrity may range from receiving a grade of zero on an assignment/exam to receiving an XF in the course.

Website: From time to time, items will be posted on school BB for your review. Please check the website the evening before each class for any updates.