Case Study: Third-party Risk Management
After completing this reading, you should be able to: Explain how risks related to the use of third parties can arise and describe characteristics of an effective third-party risk management framework. Describe the lessons learned from the case study involving…
Risk Governance
After completing this reading, you should be able to: Explain Basel regulatory expectations for an operational risk management framework’s governance. Describe and compare the roles of different committees and the board of directors in operational risk governance. Describe the “three…
Case Study: Financial Crime and Fraud
After completing this reading, you should be able to: Describe elements of a control framework to manage financial fraud and money laundering risk. Summarize the regulatory findings and describe the lessons learned from the USAA case study. This chapter discusses…
Case Study: Cyberthreats and Information Security Risk
After completing this reading, you should be able to: Provide examples of cyber threats and information security risks and describe frameworks and best practices for managing cyber risks. Describe lessons learned from the Equifax case study. Examples of Cyber Threats…
Integrated Risk Management
After completing this reading, you should be able to: Describe the role of risk governance, risk appetite, and risk culture in the context of an enterprise risk management (ERM) framework. Summarize the role of Basel regulatory capital and the process…
Risk Monitoring and Performance Measurement
After completing this reading, you should be able to: Define, compare, and contrast VaR and tracking error as risk measures. Describe risk planning, including its objectives, effects, and the participants in its development. Describe risk budgeting and the role of…
Alpha (and the Low-risk Anatomy)
After completing this reading, you should be able to: Describe and evaluate the low-risk anomaly of asset returns. Define and calculate alpha, tracking error, the information ratio, and the Sharpe ratio. Explain the impact of benchmark choice on alpha, and…
Predicting Fraud by Investment Managers
After completing this reading, one should be able to: Explain the use and effectiveness of information disclosed by investment advisors in fraud prediction. Discuss the barriers and the costs incurred in implementing fraud prediction methods. Discuss ways to improve the…
Hedge Funds
After completing this reading, you should be able to: Explain biases that are commonly found in databases of hedge funds. Explain the evolution of the hedge fund industry and describe landmark events that precipitated major changes in the development…
Portfolio Construction
After completing this reading, you should be able to: Distinguish among the inputs to the portfolio construction process. Evaluate the methods and motivation for refining alphas in the implementation process. Describe neutralization and methods for refining alphas to be…
