Risk Management

Risk management involves the identification and analysis of loss exposures to organizations and individuals. It addresses the kinds of actions that may be taken to minimize the financial and operational impact of those risks. Risk management is concerned with identifying and measuring the risks faced by the individual or organization and intervening before they cause irreparable damage. Different types of risk include, for example, market (such as price and interest rate) risk, credit (such as default) risk, liquidity risk, operational risk, legal, political and environmental risk.

Suppose you have an internationally diversified portfolio of stocks, bonds, and options. What are the risks to your portfolio? How should you measure the magnitude of these risks? How will you manage your portfolio risks in real time to minimize the negative impact? Or suppose your bank has a large portfolio of auto loans, or mortgage-backed securities, or corporate bonds, some of which are likely to default. How do you measure and manage the default risk? Or an electric utility is installing a new carbon-capture technology with a whole slew of related risks, from engineering and technological to financial to legal. How do you quantify them and work to minimize them? Or an energy trader is short natural gas futures. What is the risk of the position? Is it well within the limits established for this trader by the company’s risk management office, or is the trader taking on too much risk that may hurt the organization?

These are the types of questions the risk manager deals with.

Risk management is an essential component in the overall financial management expertise and an integral part of decision-making in financial institutions and non-financial corporations. Risk management techniques are used by a variety of professionals. The recent financial crisis has emphasized the importance of careful and skillful risk management for financial and non-financial companies alike. Graduates with university-level training in risk management have a clear edge in today’s times.

A Risk Management student graduates with a Bachelor of Business Administration degree.    

Do my interests fit?

Risk Management students typically have interests in:

• Portfolio diversification
• Asset-liability management
• Hedging with derivatives (options, futures, and swaps)
• Estimating default probabilities
• Calculating value at risk
• Stress testing
• Scenario analysis
• Risk allocation

In addition to the cutting-edge educational experience provided by the internationally renowned group of faculty, our program has a number of highlights that enrich your academic life and provide competitive advantages on the job market:

• Do not miss the chance to join the Finance Student Association, an important venue connecting you to employers, faculty, and fellow students and helping you get involved. Through joining, you will get a chance to participate in the annual Quinnipiac Global Asset Management Education Forum in New York City.
• Participate in the OU/Oklahoma Bankers Association Summer Internship program! The internships will provide the students with a hands-on banking experience.
• Apply for the Price Scholar Internship, a prestigious internship that places you in NYC for the summer.

How much will I make?

Visit the U.S. Bureau of Labor Statistics’ website to explore the median pay for jobs you can pursue with this degree. 

How do I know if this degree is right for me?

A good math background is very helpful in getting through the rigorous course work. Other useful skills include capacity for precision, detail and order; ability to work alone and concentrate for long periods of time; ability to make sound judgments and decisions; ability to explain complex financial data to others; analytical and logical thinking; and technological skills.

The Michael F. Price College of Business has been accredited since 1926 by the Association to Advance Collegiate Schools of Business. Price College is ranked in the top 12 percent of AACSB International’s accredited undergraduate programs by U.S. News and World Report.

Michael F. Price College of Business
Phone: (405) 325-5591
Email: undergrad@ou.edu
Website: price.ou.edu