Financial Risk Management

The purpose of this course is to provide students with an understanding of the broad range of concepts and techniques concerned with risk management and controls, some of which may be quantified, while others may be treated in a more subjective manner. Financial Risk Management combines innovative analytical methods with traditional risk management processes and new approaches for managing risk by corporations.
We will focus on the following six risks and the risk management: (1) foreign exchange risk (2) interest rate risk (3) credit risk (4) securitization risk (5) insurance or pure risk, and (6) catastrophe risk. Using case studies, we will learn how risk management can increase a firm’s value, and how risk controls and the techniques can accomplish an organization’s specific risk management objectives.

Financial Institutions Management

The financial services sector today is undergoing rapid and dramatic change. With increasing globalization, and new trends such as securitization, the managers of financial intermediaries must increasingly concern themselves with the management of financial risk. This course will give students an understanding of the main features of Financial Institutions Management (FIM), concentrating on 5 main areas: (1)The nature of financial institutions and the functions they perform. (2)Asset-Liability Management (ALM), examining the factors that affect the value of financial institutions, and the techniques used for determining this value. (3)Asset and liquidity management and their significance for the balance sheet. (4)The sources of funds: capital, liabilities and off-balance-sheet (OBS) management. Finally, (5)Domestic and international financial services, including current issues in monetary and financial reform, and how these impact on financial institutions.

Portfolio Management

This course applies the modern portfolio theory (MPT) for rational decision making in institutional money management. The selected topics include (1) managing investment risk exposures; (2) establishing portfolio management policies; and (3) managing and evaluating client portfolios. Case analyses are central in this course combined with theoretical and institutional understanding of money management industries in Japan, the US and the rest of the world. In addition to optimal portfolio decision making, the course deals with an interesting aspect in money management that managers most likely do not choose the best portfolio with information asymmetries between managers and their clients. Under this more realistic setting, the students can learn the reason why most money managers do not optimize but sub-optimize their client portfolios to guard themselves, which not only distort their client portfolios but also leads to cross sectional and time series pricing patterns as observed in the market place. Thus, this course guides students to an optimal solution as well as to a sub-optimal solution in institutional asset management. The students are expected to learn under what situation a sub-optimal solution (i.e., window dressing) is better than a fully optimized one for clients and money managers themselves. They are also expected to know the effect of such a behavioral pattern of money managers on capital market pricing distortions.
Before taking this course, it is highly recommended to have taken Capital Markets and Corporate Finance.

Corporate Restructuring

Corporate Restructuring is a study in the financial policy of certain industrial corporations which at one time or another have found it necessary to undergo restructuring for their long-run survivorship. This course applies financial analysis to an actual organizational policy problem in order to study the pathological instances of industrial corporations in Japan, the U.S. and Europe. It is important in this course to identify corporate strategic symptoms to preemptively and quickly apply corporate restructuring measures and techniques. We compare the operation of such problematic firms with that of normal functioning industrial corporations by employing financial analysis to choose alternative courses of corporate restructuring. The course uses cases designed to analyze each type of restructuring transactions approximately classified into the four categories: (1) Restructuring of Equity Ownership; (2) Restructuring through Leverage Transactions; (3) Restructuring with Significant Strategic Options; and (4) Mergers and Acquisitions. A special emphasis is given to the underlying difference in major corporate restructuring trends between Japan and Anglo-America and between the old and the new economy firms.
Before taking this course, it is highly recommended to have taken Management, Accounting for Decision Making and Corporate Finance.

Capital Markets

The course overviews capital markets in terms of trading, pricing and inter-market interactions. Topics in this course includes players, institutional arrangements and basic instruments traded in the capital markets; the cost of debt and equity capital; rational risk and return tradeoffs; market efficiency; and the pricing of derivatives (futures, options and swaps) .
Participants in this course should obtain knowledge and application skills of capital market instruments and the ways they function. The use of Internet is highly recommended as one of the most important information sources in this course.

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