Risk Management & Financial Institutions
J. Hull

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John C. Hull's Financial Risk Management text is the only text to take risk management theory and explain it in a "this is how you do it" manner for practical application in today's real world. We found that most professors are looking for a book that contains up to date information, and is written for application in the real work environment. Hull's text offers students the ability to gain knowledge that will stay with them beyond college and be useful in the real world. Based on one of the most popular MBA courses at University of Toronto entitled "Financial Risk Management", this text focuses on the ways banks and other financial institutions measure market, credit and operational risk. John C. Hull, author of the book "Options, Futures, and Other Derivatives" which became the standard reference text for traders, wrote "Risk Management and Financial Institutions" for use in instruction as well as trade. The practical nature of the book lends itself to a "this is how you do it" presentation style that includes excellent account of the new Basel II regulatory requirements for banks effective in 2007. John C. Hull's Financial Risk Management text is the only text to take risk management theory and explain it in a "this is how you do it" manner for practical application in today's real world. We found that most professors are looking for a book that contains up to date information and is written for application in the real work environment. Hull's text offers students the ability to gain knowledge that will stay with them beyond college and be useful in the real world. Based on one of the most popular MBA courses at University of Toronto entitled "Financial Risk Management", this text focuses on the ways banks and other financial institutions measure market, credit and operational risk. John C. Hull, author of the book "Options, Futures, and Other Derivatives" which became the standard reference text for traders, wrote "Risk Management and Financial Institutions" for use in instruction as well as trade. The practical nature of the book lends itself to a "this is how you do it" presentation style that includes excellent account of the new Basel II regulatory requirements for banks effective in 2007. Would you like a text that is so applicable to the industry that students could use it in their careers? John C. Hull is author of "Options, Futures, and Other Derivatives" which is the standard trade reference text. It was a very influential text and is referenced in many places by the Bloomberg system. It has also been cited in court rulings and has led to college courses becoming more real world oriented by teaching students with a text that is fit for practitioners. Does your current text tie the most current information on the subject to real world issues?Excellent description of the history of bank regulation and Basel II. (a) Provides history of bank regulations and highlights reasons for its importance (b) Gives students perspective on changing regulations (c) Keeps students knowledge current for application in the work environment. For example, in Chapter 7, the history of bank regulation covered through present day and Basel II is then explained in depth. Copulas are explained in a relatively unsophisticated way that readers can understand. This brings the student to an understanding of how to quantify how two or more variables depend on each other in a way that is tangible and memorable. For example, Chapter 6 presents the intuition followed by a detailed numerical expression. This chapter builds on the previous chapter "Volatility" and explains Copulas by way of a previous understanding of correlations, distributions, and factor models. Discussion of operational risk, model risk, liquidity risk, economic capital and RAROC. For example, operational risk in Chapter 14 covers elements and levels of loss and their relationship to Insurance and Sarbanes Oxley. Chapter 15 includes a variety of models risk in finance as well as liquidity ranging from the traditional perspective to it's comparison with profitability. Chapter 16 is a dedicated chapter focusing on economic capital and RAROC allowing students to fully grasp the concepts of each How do you bring the theory to life in your course?Many real-world examples to illustrate key points. Brings the student's focus from classroom application to thought about use in the industry. For example, Chapter 7 , Business Snapshot 7.2 covers the possibility of a Basel III standard due to changing better credit value-at-risk models. Also, Chapter 18, Business Snapshot 18.1 covers multiple real world losses that students can learn from. Examples in the section include Procter and Gamble losing about $90 Million in 1994 trading highly exotic interest rate derivatives contracts with Bankers Trust and their course of action. Other Points of Distinction: How do you assess students' understanding of the material?End of Chapter Problems are divided into two groups: "Questions and Problems" and "Assignment Questions". Solutions to Questions and Problems are at the end of the book and Solutions to Assignment Questions are made available from Prentice Hall to adopting instructors in the Instructors Manual. Do all of your students come into this course having taken Options and Futures courses?A preliminary course on options and future markets is not necessary. If students have taken the course ahead of time, the first four chapters are not necessary. Other chapters are flexible in terms of content and what the instructor incorporates into the course. Chapter 18 is a beneficial course for the last class because it draws together many of the points in the earlier chapters. How important is the coverage of the Credit Derivatives market to your course?Excellent overview of the credit derivatives market. The history and important elements in the derivatives market are covered very clearly and thoroughly . For example, Chapter 13, discusses the derivatives in depth, including sections focusing on credit default swaps, CDS forwards and options, basket credit default swaps, collateralized debt obligations, and valuation of a basket CDS and CDO.