Numbering Code	G-GAIS00 84030 LE43 G-GAIS00 84030 LE44 G-GAIS00 84030 LE24	Year/Term	2022 ・ Second semester
Number of Credits	2	Course Type	Lecture
Target Year	From 1st to 3rd year students	Target Student
Language	English	Day/Period	Thu.2
Instructor name	KANAMURA TAKASHI (Graduate School of Advanced Integrated Studies in Human Survivability Associate Professor)
Outline and Purpose of the Course	This course aims to explain basic concepts of risk management to handle uncertainties of businesses and discusses the practical methods to bring risk management into strategic actions. Module 1 introduces existing risk management methods. Module 2 discusses risk hedging practices and module 3 tries to obtain deeper understandings of risk management using group discussions after introducing the processes to find new business strategies by balancing risk and return. Module 1 starts with the definition of risk and explains risk measurement and management of market risk and credit risk in business activities. Regarding market risk, we introduce a new concept of VaR (Value at risk). Regarding credit risk we explain the quantity of credit risk defined by restructuring costs of business activities and risk capital accompanied by credit ratings. Module 2 discusses asset pricing of financial derivatives used as strategic risk management tools and also discusses risk hedging strategies by using financial derivatives. After explaining basic asset pricing concepts, incomplete market pricing, which offers price boundaries of the asset, is explained as well as complete market pricing. Additionally, we discuss market risk hedging practices in businesses using financial derivatives including swaps. Module 3 explains modern portfolio theory and applies the theory to the determination of optimal portfolio of power generation facilities where power companies are considered as the portfolio of fuels, emissions, and power as an example to bring risk management theory into a strategic action.
Course Goals	Participants obtain new viewpoints on their own researches by learning basics and applications of risk management.
Schedule and Contents	Module 1 【Class 1】　Overview and objective of risk management 【Class 2】　Market risk 【Class 3】　Credit risk 【Class 4】　Operational risk Module 2 【Class 5】　Basic of asset pricing 【Class 6】　Complete market pricing 【Class 7】　Incomplete market pricing 【Class 8】　Weather derivative pricing 【Class 9】　Risk hedging practices モジュール 3 【Classes 10&11】 Modern portfolio theory (Mean-variance approach) 【Class 12】 An application of MPT: optimal portfolio of power generation facilities for power companies 【Class 13】 Challenges of risk management: new risk indices 【Class 14】 Risk management of energy companies: discussions 【Class 15】 Summary of this lecture and future directions of risk management
Evaluation Methods and Policy	Comprehensive evaluation based on quizzes, a term paper, and class participations
Course Requirements	None
Study outside of Class (preparation and review)	Separately instructed
References, etc.	Investment Science, New York, Luenberger David G , (Oxford University Press)