Risk Management

The following information is for 2025. The details will be updated before the start of A semester. 1.Introduction Introduction to financial engineering. 2.Overview of Recent Developments of International Financial Cooperation(Ms. Tomoda, Bank of Japan) 3.Bankruptcy Flow of funds within a corporation Theoretical stock price Geometric Brownian motion with drift Risk vs. return for companies Bankruptcy and insolvency Credit rating tiers 4.Financial instruments 5.Alternative business (Mr. Okamura, CEO of S&S investments) Introduction to the alternative investment Risk management in the business sector 6.How traders manage their exposures 7.Mutual funds and hedge funds 8.Private equity investment (Dr. Akaike, CVC senior partner, CEO of CVC Japan) Introduction to PE investment Importance of fund manager selection Mechanism of PE investment Value creation at the portfolio companies Asset scale of PE fund Some cases of an elicitation of risk Buyout investment process Strategic/commercial due diligences Parties involved in the deals Value for investors created by the PE funds via 3 principal levers Source of the investment profits Value chain of the fund management business Overall picture of risk at due diligence phase Task areas covered by the due diligence Risk control through assignment agreement Overview of the risk diversification Difference between individual and group risk From risk-taking to risk control Valuation of the Japan/Asian PE market Case studies of historical investments by CVC 9.Value at Risk and expected shortfall 10.Interest rate risk 11.Risk of free money

In principle, lectures will be conducted in person and will follow a traditional classroom format. There are few plans for group work or collaborative activities.

Short test after each class and a final report

No specific textbook is required; instructional materials will be distributed in class. Rather than prior preparation, students are encouraged to focus on post-lecture review, which can be effectively conducted in conjunction with the preparation of assigned reports.