Imperial College London

DrAnastasiyaOstrovnaya

Business School

Senior Teaching Fellow
 
 
 
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Contact

 

a.ostrovnaya

 
 
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Location

 

15 Prince's GardensSouth Kensington Campus

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Summary

 

Risk Management - BUSI97250

Aims

This course will provide an overview of risk management and corporate governance topics. In the risk management part of the course, we will discuss the financial instruments used to manage risks and the principle techniques firms employ when managing risks. We will cover different derivative securities (such as futures, forwards, swaps, and options), learn the principles of the valuation of these derivatives, and discuss their relative advantages and disadvantages as risk management tools. We will also discuss key risk management methods and the main reasons to go for or to avoid risk management in certain situations.

In the corporate governance part of the course we will examine various situations where a firm’s stakeholders—such as managers, shareholders, and creditors—have differing incentives regarding actions taken by the firm. We discuss situations where the optimal action from the management’s point of view differs from what would be optimal for the shareholders. We will also see how such misalignment of incentives can arise between creditors and shareholders. Most importantly, we will discuss how corporate governance mechanisms can help to resolve these situations and where corporate governance will fail. We will cover specific topics such as executive compensation, mergers and acquisitions, and the role of board of directors.

Knowledge Objectives

• Become familiar with the specific terminology and key principles related to corporate governance, derivative      securities, and risk management.

• Understand the central issues regarding the alignment of interests of the different company stakeholders and  problems related to information asymmetry in the context of corporate governance and their possible solutions.

• Understand the principles of standard derivative securities and how these securities can be used to manage risks.

• Understand the basic reasons for and against risk management and the principal methods of controlling risks.

Skill Objectives

• Be able to distinguish between the different types of asymmetric information, identify the problems each type can  create and suggest possible solutions.

• Be able to discuss key issues related to corporate governance such as mergers and acquisitions, board of directors,  executive pay etc.

• Be able to value standard derivative securities.

• Be able to determine appropriate basic risk management strategies.

Role

Course Leader