The aim of the assignment is to critically discuss the current management of financial risk for a particular company (bank or multinational), in relation to recent theory and practice. This coursework is worth 40% of the final grade for the module. The analysis requires you to make full use of all academic sources including books, periodicals and journal articles. Credit will be given for effective planning and organization as evidenced by research and referencing to sources, analytical ability, awareness of strengths and limitations of the information produced, and good presentation. Credit will also be given for the variety and depth of resources used (Bloomberg and BI, annual reports, library resources, etc.). The rules on late submission and plagiarism are applied and fully enforced by the School.

PART A. Case study
Choose one particular firm from the list below:
Industry Company
High Tech Amazon
High Tech Google
High Tech Apple
Banking Barclays
Banking BNP Paribas
Banking Credit Suisse Group
Banking Lloyds Banking Group
Banking Unicredit
Oil BP
Oil Shell
Oil Gazprom
A.1. Based on a detailed industry analysis and review of relevant literature,

a) Identify the three most relevant sources of financial risk involved in your particular industry and the impact they may have on the operations of firms in this industry.
(12 marks)

b) For one type of risk identified above, discuss current risk management practices in the industry, mentioning the risk management policy of main competitors.
(12 marks)
A.2. For your chosen firm and type of risk identified above,

a) Determine your firm’s broad exposure(s) to that risk and perform some sensitivity analysis to incorporate future changes of market conditions into our analysis. Note that the sensitivity analysis should be as realistic as possible and based on the discussions we have done during lectures and seminars.
(20 marks)
b) Explain precisely how these risk exposures are being managed, including the use of financial derivatives and other hedging strategies.
(10 marks)
c) Provide detailed and concrete recommendations on how to better manage each risk exposure, offering alternative hedging strategies, based on the firm’s current business environment and the comparable analysis performed in A.1.
(10 marks)

PART B. Model risk
What is “model risk” and why/how is it relevant to the financial risk management of a firm? Here you need to provide a critical discussion of the topic, based on a detailed review of current literature.1
(26 marks)
Presentation:
Your report needs to adopt a business report format and has to include a cover page (with module title and code, explicit title and word count), executive summary and table of content. The report should be clearly written in proper English, well-structured (with section and sub-section titles) and perfectly formatted (e.g. all tables/figures should be clear with an explicit title). All sources should be cited and referenced using the Westminster Harvard referencing style.
(10 marks)

General instructions:
 The coursework is an individual effort with a total word limit of 2,500 words (+/-10%), excluding cover page, table of content, references and appendices.
 At each stage of the analysis the relevant theory applied should be mentioned, and all the material used should be cited and referenced appropriately.
 Across the assignment, about 10 marks are awarded for evidence of independent and critical work, including the variety and depth of resources
used (Bloomberg, FT, annual reports, library resources, etc.)
 An electronic copy of your assignment should be submitted (in Word or PDF format) via the module Blackboard site and will be checked via Turnitin for plagiarism.
 Anonymous marking: Do NOT include your name or student ID within the file name or anywhere within your submission. The submission will be subject to anonymous marking. Having logged into Turnitin on
Blackboard, the system will record your details anonymously and tutors will only see your name after the entire submission has been assessed and provisional marks have been released to all students at the same time.
 Feedback will then be available on Blackboard and/or by email.