Method-Based Risk Management in Capital Markets

This module enhances methodological competence while at the same time demonstrating the applicability of concrete concepts in risk management on capital markets. Students acquire, in particular, a deep understanding of the measurement and “pricing” of risk and of the possibilities for hedging it using derivative instruments. When taken as part of the specialization “Economics and Law of the Global Economy,” this module—together with the compulsory modules and the two other elective modules—enables students to develop an integrated overall understanding of the global economy.

Two areas of risk management that have each been awarded Nobel Prizes are portfolio optimization and option pricing theory. Both areas are covered in substantial depth in this course. In addition to engaging with the necessary formal frameworks, the course places special emphasis on examining the practical implementability of these theories in everyday capital market practice, drawing on econometric methods.