COURSE INFORMATION Course Title: RISK MANAGEMENT AND INSURANCE

Code	Course Type	Regular Semester	Theory	Practice	Lab	Credits	ECTS
BAF 422	B	2	3	0	0	3	6

Academic staff member responsible for the design of the course syllabus (name, surname, academic title/scientific degree, email address and signature)	NA
Lecturer (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	Orfea Dhuci
Second Lecturer(s) (name, surname, academic title/scientific degree, email address and signature) and Office Hours:	NA
Teaching Assistant(s) and Office Hours:	NA
Language:	English
Compulsory/Elective:	Compulsory
Classroom and Meeting Time:
Course Description:	BAF 422- Risk Management and Insurance: This course gives information on risk identification and measurement for insurance. The students will be able to get enough knowledge on risk control tools, pricing of risk, the concept of risk insurance, fundamentals of insurance business; life and health insurance, property and liability insurance counteracts government regulation, international insurance markets.
Course Objectives:	The course is designed to provide the students with the structure of the risk management process, deeper knowledge of the financial risk management, analytical thinking and precise mathematical derivation, comprehensive core concepts of risk theory and risk management

COURSE OUTLINE

Week	Topics
1	Syllabus Review, Course Programming Decision-Making: Actions, Events, States of Nature, Actions Outcomes, Mathematically Calculated Probability, The Decision on Action, Setting the Action’s Objective
2	Risk Definition, Risk Fallacies and Risk Misperceptions The Epistemological Status of Risk
3	The Decision-Maker’s Risk Attitude: The Utility Theory and the Risk Attitude Toward the Risk, Other Theories Regarding the Individuals Risk Attitude. Integration of the Risk Attitude into the Decision Making Process The Risk Aversion and the Attached Probability to the Risky Event
4	The Risk Response to the Risk: Residual Risk vs. Inherent Risk, Risk Acceptation, Risk Mitigation, Risk Sharing (Hedging and Insurance) Risk Avoidance. The Risk Response of a Group of Decision Makers vs. Risk Response of a Decision Maker.
5	Enterprise-Wide Risk Management (ERM): The Five Stage Model of ERM (Objectives Setting, Identification, Assessment and Measurement, Risk Treatment, Risk Monitoring). Risk Appetite and Risk Tolerance, The Role of Systems and Risk Officers in Risk Management Process
6	Risk Anomalies: Moral Hazard, Adverse Selection, Pyramid Schemes, Winners Curse, Mismatch Between Risk Position Requirements and the Risk Attitude of the Position Assignee
7	Taxonomy of Risks for Individuals and Companies: Event-Driven Risk Classification, Diversified vs. Undiversified Risk, Financial vs. Business risk
8	Measurement/Evaluation of Risk: Qualitative Assessment/Evaluation of Risk
9	Measurement of Risk Quantitative Methods used to Measure the Risk, Probabilistic Approaches vs. Non-Probabilistic Approaches
10	Management of Market Risk
11	Credit Risk Management
12	Liquidity risk Management
13	Management of Interest Rate Risk
14	Foreign Currency Risk: Measurement and Management

Prerequisite(s):	- Calculus: Differentiation and Integration - Probability: Probability and Probability Distribution, Confidence Intervals and Hypothesis Testing - Statistics: Descriptive Statistics, Statistical measures, Correlation and Regression, Time series Analysis - Investing: Investing Risk And return, Fixed Income securities, Options and Other Derivatives, Currency and Commodity Markets Portfolio Theory - Corporate Finance: Investment Decisions and Strategies, Short and Long Term Financing, Capital Structure
Textbook:	Financial Risk Management: A Practitioner's Guide to Managing Market and Credit Risk, Second Edition Author: Steven Allen Published Online: 2 OCT 2015 10:16PM EST Print ISBN: 9781118175453 Online ISBN: 9781119203209
Other References:	Books: Title: Financial Risk Manager Handbook + Test Bank: FRM Part I/Part II Author: Philippe Jorion, GARP, Publisher: Wiley Finance, Sixth Edition, 2010 ISBN: ISBN 13: 978-0470904015 ISBN 10: 0470904011 Title: The Essential of Risk Management Author: Michel Crouhy, Dan Galai, Robert Mark, Publisher: McGraw-Hill, 2005 ISBN: ISBN 13: 978-0071429665 ISBN 10: 0071429662 Other Materials: a) Available from the instructor b) Internet sites recommended by the instructor (about risk management cases) c) Central banks regulations regarding the risk management and capital
Laboratory Work:
Computer Usage:
Others:	No

COURSE LEARNING OUTCOMES

1	Full understanding of risk, risk attitude and risk response.
2	Understanding the risks and the anomalies of companies and their taxonomy
3	Basic approaches used to assess or to measure the risks
4	Understanding the management of the main risks faced by the companies
5	Understanding the role of the allowances and capital needed to amortized the losses
6	Other Outcomes:
7	 Vocational Outcomes
8	 Essential Employability Skills
9	 Post Master Education Skills

COURSE CONTRIBUTION TO... PROGRAM COMPETENCIES (Blank : no contribution, 1: least contribution ... 5: highest contribution)

No	Program Competencies	Cont.
Master of Science in Banking and Finance Program
1	The students are gained the ability to look at the problems of daily life from a broader perspective. They gain the needed skills not only to understand economic problems in banking and finance but also to construct a model and defend in meaningful way.	5
2	They have knowledge about the finance and banking.	5
3	They have knowledge about the money and banking.	5
4	They have knowledge about the international finance and banking.	5
5	They have ability to use mathematical and statistical methods in banking and finance.	5
6	They know how to use computer programs in both daily office usage and statistical data evaluations in banking and finance department.	4
7	They have necessary banking and finance skills that needed in private and public sector.	5
8	They are intended to be specialist in one of departmental fields that they choose from the list of general economics, finance economics, public finance, corporate finance, finance management, international finance markets and institutions, banking and central banking, international finance and banking, money and banking, international trade and banking.	5
9	They have ability to utilize fundamental economic theories and tools to solve economic problems in banking and finance.	4
10	They are aware of the fact that banking and finance is a social science and they respect the social perspectives and social values of the society’s ethics.	4

COURSE EVALUATION METHOD

Method	Quantity	Percentage
Midterm Exam(s)	1	30
Project	1	5
Term Paper	2	4
Final Exam	1	32
Attendance		10
Other	5	3
	Total Percent:	100%

ECTS (ALLOCATED BASED ON STUDENT WORKLOAD)

Activities	Quantity	Duration(Hours)	Total Workload(Hours)
Course Duration (Including the exam week: 16x Total course hours)	16	3	48
Hours for off-the-classroom study (Pre-study, practice)	16	3	48
Mid-terms	1	16	16
Assignments	2	6	12
Final examination	1	16	16
Other	5	2	10
Total Work Load:			150
Total Work Load/25(h):			6
ECTS Credit of the Course:			6