Hedge Fund Risk Management ECON5071
- Academic Session: 2020-21
- School: Adam Smith Business School
- Credits: 20
- Level: Level 5 (SCQF level 11)
- Typically Offered: Semester 2
- Available to Visiting Students: No
- Available to Erasmus Students: No
The course aims to investigate structured analytic framework for the analysis of investment funds and unregulated funds. Students will learn to:
1) Distinguish the risk profile of a fund's investment strategy, structure, leverage and liquidity;
2) Apply financial analytic tools used to benchmark the performance and risk profile of a fund;
3) Design ad-hoc investment structured products to meet customers' needs;
1. Lecture: a two hour lecture a week for ten weeks;
2. Tutorial: one hour tutorial a week for five weeks.
3. Revision lecture: one 2 hour lecture before the degree exam.
Students are assessed on the basis of coursework (25%) total word length 3,000 words and a final written examination (75%). The coursework will be a short empirical project. The final examination takes the form of a two-hour written paper, with students being required to answer two questions from a choice of four.
Main Assessment In: April/May
In periods of market uncertainty investors increasingly seek returns that are not correlated to mainstream asset classes. Hedge funds can help investors to achieve such a goal. The aim of the course is to provide students with an in-depth knowledge of investment funds with a particular emphasis on hedge funds, their investment strategies, and the associated risks.
The course will make large use of the Bloomberg Trading Room and students will combine the standard theory introduced during the lectures with practical applications. The course will also use professionals working in the financial industry.
Intended Learning Outcomes of Course
By the end of this course students will be able to:
1. Examine the current market and structures for investment funds;
2. Become familiar with the concepts of hedge fund investment;
3. Understand the techniques used to generate "long" and "short" exposure in spot/futures markets;
4. Identify and analyze key risks related to trading position (i.e. market risk, operational risk, model risk);
5. Understand the legal and regulatory aspects of hedge funds;
6. Design structured investment products to meet clients' risk/return targets.
Minimum Requirement for Award of Credits
Students must submit at least 75% by weight of the components (including examinations) of the course's summative assessment.