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Professional Risk Manager (PRM) Certification: Level 1

EduPristine's PRM Training will help you "Build an Awesome Career in Risk Management"
3.9 (7 ratings)
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105 students enrolled
Last updated 7/2013
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What Will I Learn?
Course Objective is to help participants successfully pass the PRM Exam - I
Lucrative career options in Risk Management, Trading, Structuring, Modeling, etc. PRM holders have positions such as Chief Risk Officer, Senior Risk Analyst, Head of Operational Risk, and Director, Investment Risk Management, to name a few.
Strong value addition to your skills, credentials and resume
Complete coverage of risk management concepts
Globally recognized professional certification for banking and finance professionals by PRMIA (Professional Risk Managers' International Association)
View Curriculum
  • The only prerequisite to attempting the PRM exams is membership in PRMIA. Passing all four exams leads to the PRM designation.

Why Professional Risk Manager?

If you are looking for a lucrative finance career in Risk Consultancy Firms, Banks, Insurance companies, Asset Management, Hedge funds, Investment banks etc., then PRM (Professional Risk Manager) is the right catch for you.

PRM is a professional designation awarded by the PRMIA to Professional Risk Managers (PRM) who passes their four online exams.

PRM-I Curriculum focuses on providing knowledge and understanding of:

  • Finance Theory: Risk & Risk Aversion, Portfolio Mathematics, CAPM & Multifactor Models, Capital Structure etc.
  • Financial Instruments: Analysis of Bonds, Futures & Forwards, Swaps, Credit Derivatives etc.
  • Financial Markets: Structure of Financial Market, Money Market, FOREX, Commodities Market etc.

Professional Recognition & Job Satisfaction

  • A PRM Charter can improve job opportunities, professional reputation & pay. 
  • Types of Businesses that hire PRMs include: Risk Consultancy Firms, Banks, Insurance Companies, Asset Management, Hedge Funds, Investment Banks etc.

How to update your CV with Professional Risk Management Skills?

After qualifying Professional Risk Manager Exam, you can add heavy duty terms in your resume like "Risk Management", "Basel-I, II, III",  "Interest Rate Risk ", "Risk Metrics", “Financial Econometrics” etc, which will surely diversify your professional reach.

EduPristine's PRM Training Program- Unique Offerings:

  • 24+ Hrs Recordings covering all topics of PRM-I in depth
  • Comprehensive Study Material for easy learning experience
  • 150 Topic wise quiz questions with explanatory answers
  • 2 Mock Tests
  • 24x7 Access to Discussion Forums to interact with faculty & fellow students 
  • One-to-one doubt clearing session for all participants
  • Comprehensive reading material for all topics

Why EduPristine's PRM Training Program??

  • One of the leading International Training Provider for Risk Managament Courses.
  • Get trained by highly proficient Risk Management Experts
  • Indepth Training to make you the best Risk Management Professional in Town
  • Complimentary access to Live Webinars on Risk Management
Who is the target audience?
  • This program is suitable for Bankers, IT professionals, Analytics and Finance professionals with an interest in risk management.
  • It is also beneficial for Btech, MBA, Finance graduates who are interested in financial risk management career.
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Curriculum For This Course
Expand All 51 Lectures Collapse All 51 Lectures 23:56:14
Introduction PRM-I
1 Lecture 03:45

This is the introductory video for PRM-I which talks about the topics covered under this course.

These topics are as follows:

·  Finance Theory

·  Financial Instruments

·  Financial Markets

Preview 03:45
Finance Theory
12 Lectures 08:20:19
This lecture gives an overview of risk and risk aversion, introduces the utility function and mean – variance criteria.

This lecture:
·  Explains the concepts of Utility and Utility Maximization

·  Explains the ways of the determination of utility function

·  Explains the concept of Risk Aversion

·  Discusses the Mean-Variance Criterion

·  Defines the Sharpe, Treynor and Information Ratios

·  Defines Jenson’s Alpha, RAROC, RoVaR and RAPM

·  Defines the Sortino, Omega Index and Kappa Ratios
Preview 58:43

This lecture gives an introduction to portfolio mathematics, from means and variances of returns to correlation and portfolio variance. It also discusses about efficient frontier, portfolio theory, portfolio diversification, VaR.

This lecture:

·  Explains the calculation of the return, mean return, variance and standard deviation of a single asset

·  Explains the calculation of the return, mean return, variance and standard deviation of a portfolio

·  Explains the calculation of the correlation between two assets

·  Identifies a dominated portfolio

·  Discusses the efficient frontier

·  Explains the calculation of the minimum variance hedge ratio

·  Describes how diversification reduces risk

·  Describes the impact of serial correlation on the standard deviation of returns

·  Explains the calculation of Value at Risk in a portfolio

·  Explains the calculation of the probability that one portfolio will outperform another portfolio

·  Explains the calculation of the probability of attaining a return goal

Portfolio Mathematics

This lecture discusses the concept of how capital is allocated between portfolios depending on the risk preferences.

This lecture:

·  Describes efficient portfolios that satisfy the mean-variance criterion

·  Describes tolerances and preferences for Risk vs. Return

·  Shows the efficient frontier for two assets

·  Shows the efficient frontier for a multi-asset portfolio

·  Defines the risk-free asset

·  Derives and describe the Capital Allocation Line

·  Describes the Capital Markets Line

·  Defines the market portfolio

·  Describes the separation principle

  • Lists the predictions of Mean-Variance Portfolio Theory
Capital Allocation

This lecture discusses about CAPM model, systematic risk and performance measures. It also talks about APT and multifactor models.

This lecture:

·  Describes the Capital Asset Pricing Model (CAPM)

·  Describes Beta as a Measure of Relative Risk

·  Lists the assumptions of the CAPM

·  Defines risk premium

·  Derives the Security Market Line

·  Defines and explains the calculation of the Sharpe Ratio and Jensen’s Alpha

·  Describes the Single Index Model

·  Describes systematic and specific risk

·  Describes the Arbitrage Pricing Theory (APT)

The CAPM and Multifactor Models

This lecture talks about the concept of capital structure, advantages and costs related to debt financing, agency costs.

This lecture:

·  Explains and Shows the formula for the Value of a Firm

·  Describes the Agency costs of Equity

·  Describes the Agency costs of Debt

  • Describes the characteristics of Debt and Equity
Basics of Capital Structure

Lecture 7-11 explains the different types of term structures and various theories behind them.

These lectures:

·  Describes yield to maturity as an internal rate of return

·  Defines spot curve, spot rate and term structure

·  Defines and describe the yield curve

·  Demonstrates the process of bootstrapping

·  Defines no-arbitrage pricing

·  Explains the calculation of implied forward rates

·  Describes normal, flat and inverted yield curves

·  Describes the pure expectations theory

·  Describes the liquidity preference theory

·  Describes the preferred habitat theory

·  Describes the market segmentation theory

·  Describes mean reversion

·  Explains the calculation of the value of non-callable bonds using term structure models

·  Describes the impact of an embedded call on the value of a bond using term structure models

·  Explains the calculation of effective duration and convexity within a term structure model

·  Defines Option Adjusted Spread

·  Discusses the implications of choosing one term structure model over the others

Term Structure of Interest Rates_Part_1

Term Structure of Interest Rates_Part_2

Term Structure of Interest Rates_Part_3

Term Structure of Interest Rates_Part_4

Term Structure of Interest Rates_Questions

This lecture discusses about the valuation of the most basic derivative: Forwards.

This lecture:

·  Defines spot price and forward price

·  Explains the calculation of the value of a forward contract at expiration and prior to expiration

·  Describes the impact of intermediate cash flows on the value of a forward contract

·  Describes the impact of storage costs on the value of a forward contract

·  Describes the impact of convenience yield on the value of a forward contract

·  Explains the calculation of the forward price of a bond, stock, currency and commodity

·  Defines and Discusses a Forward Rate Agreement (FRA)

·  Explains the calculation of the value and price of FRA

Valuing Forward Contracts

This lecture talks about basics of option pricing, Black-Scholes-Merton formula, and implied volatility.

This lecture:

·  Discusses the factor influencing option price

·  Describes put-call parity

·  Discusses the basic principles of the binomial option model

·  Defines and discusses delta-hedging

·  Explains risk-neutral valuation

·  Explains the calculation of an option price using a one-step binomial model

·  Defines the symbols and letters of inputs into the binomial model

·  Describes the basic principles of the Black-Scholes-Merton model

·  States the Black-Scholes-Merton formula for pricing a call option

·  Explains the calculation of an option price using Black-Scholes-Merton model

·  Identifies and discusses the graphic representations of a put and a call

·  Defines delta, gamma, vega, theta and rho

·  Defines and discusses implied volatility

·  Defines a volatility smile

·  Defines intrinsic value and time value

Basic Principles of Option Pricing

Finance Theory : Quiz
40 questions
Financial Instruments
24 Lectures 08:26:45

This lecture talks about different types of bonds, market conventions of different types of bonds in different countries.

This lecture:

·  Defines and discusses the various characteristics of bond issues

·  Lists and discusses the Moody’s and S&P ratings for bonds

·  Defines clean price, dirty price, accrued interest and bond yield

·  Defines bond spread (yield spread) and bid/ask spread

·  Describes the impact of liquidity on spreads

·  Discusses strips, floating rate notes and inflation-indexed bonds

Basic of Bonds

Lectures 14-18 discusses the main types of bonds, their cash flows and their features.

These lectures:

·  Defines nominal (notional, face, par, maturity) value, maturity, term to maturity, coupon, coupon-rate, zero-coupon and vanilla bond

·  Describes a bond as a series of cash flows

·  Defines index-linked bonds, securitized bonds, amortizing bonds, callable bonds, putable bonds and convertible bonds

·  Defines discount and premium

·  Explains the calculation of the clean and dirty price of a bond

·  Explains the calculation of current yield and yield to maturity

·  Describes the relationship between yield and price

·  Discusses the “pull to par” of bond prices

·  Defines DVBP, dollar duration and key rate duration

·  Explains the calculation of the modified duration of a bond

·  Describes the shortcomings of Macauley and Modified durations

·  Explains the calculation of the DVBP of a bond

·  Discusses Effective Duration

·  Discusses the duration of a floating rate note

·  Describes the impact of an embedded call or put on duration

·  Defines basis point value (BPV)

·  Explains the calculation of the hedge ratio for a bond using BPV

·  Defines and discusses convexity

·  Describes the impact of an embedded call or put on convexity

·  Discusses the various risks associated with a bond

Bond Pricing

Dirty Price

Yield Measure


Exercise in Excel - Apply the concepts in Excel Template

Lectures 20-24 explains futures and forward contracts, their usage in hedging and speculation.

These lectures:

·  Discusses some uses of stock index futures

·  Defines index point and value of an index point

·  Describes index arbitrage and program trading

·  Explains the calculation of a minimum variance hedge ratio for a portfolio of stocks, using futures, given beta

·  Describes some risks in index hedging

·  Discusses “tailing the hedge”

·  Defines covered interest parity

·  Explains the calculation of a forward exchange rate

·  Explains the calculation of a hedge ratio using foreign exchange futures

·  Discusses the relative basis risks with commodity futures

·  Defines forward rate agreement (FRA)

·  Discusses FRAs, their nomenclature, uses and settlement

·  Explains the calculation of T-bill and Eurodollar futures prices

·  Defines the tick value of a Eurodollar or T-bill futures contract

·  Defines cheapest-to-deliver and conversion factor

·  Defines the tick value of a T-Bond and Gilt futures contract

Forwards and Futures_Introduction

Forwards and Futures_Hedging_Part_1

Forwards and Futures_Hedging_Part_2

Forwards and Futures_Hedging_Part_3

Forwards and Futures_Hedging_Questions

Lectures 25-27 discusses various types of swaps and their pricing.

These lectures:

·  Defines a swap

·  Lists the key components of a swap agreement

·  Discusses equity swaps

·  Discusses commodity swaps

·  Defines buyer of interest rate swaps

·  Discusses interest rate swaps

·  Discusses currency swaps

·  Discusses basis swaps

·  Discusses volatility swaps

·  Defines par swap, accrual swap, commodity-linked interest rate swap, crack spread swap, overnight index swap, power LIBOR swap and extendible swap

·  Defines swap spread and swap rate

·  Defines the payer and receiver in swaps

·  Discusses risk of swaps

·  Discusses main uses of swaps




Lecture 28-32 talks about option concept.

These lectures:

·  Defines premium, underlying, strike (exercise) price, expiration date (expiry), in-the-money, at-the-money and out-of-the-money

·  Draws and discusses the expiration payoff diagrams of a covered call, protective put, call spread, put spread, straddle, strangle, collar, butterfly and condor

·  Describes a calendar spread

·  Discusses uses of straddles, strangles, risk reversals, collars, butterflies and condors

Basics of options

Options Terminologies

Option Strategies_1

Option Strategies_2

Option Strategies_Questions

Lectures 33-36 discusses about credit risk derivatives.

These lectures:

·  Discusses the applications of credit derivatives

·  Defines reference entity, credit event, settlement mechanism and deliverable obligation

·  Defines and discuss funded and unfunded instruments

·  Lists the types of credit events contained in a standard ISDA credit derivatives document

·  Defines and discusses credit default swaps (CDS) and their prospective cash flows any financial instrument

Credit Derivatives_Part_1

Credit Derivatives_Part_2

Credit Derivatives_Part_3

Credit Derivatives_Questions

This lecture deals in caps, floors and swaptions; and how they are used as strategies in interest rate markets.

This lecture:

·  Defines cap, floor, collar, caplet, floorlet, reference rate, exercise rate, settlement frequency, starting date and maturity

·  Describes a cap or floor as a portfolio of options

·  Discusses various uses of caps, floors and collars in hedging

·  Defines swaption, receiver option and payer option

·  Discusses the pricing of swaptions

·  Discusses the quotation conventions for caps, floors and swaptions

·  Discusses some uses of swaptions in hedging and when they might be preferred to caps and floors

Caps Floors and Swaptions

Financial Instruments : Quiz
20 questions
Financial Markets
13 Lectures 06:48:57

Lecture 38-40 discusses the importance of liquidity, the difference between exchange and OTC markets and its instruments.

These lectures:

·  Defines inter-dealer market and inter-dealer broker

·  Discusses the importance of market liquidity

·  Describes a repo and a reverse repo and their roles as sources of liquidity

·  Describes how screen-trading systems work

·  Describes a market “specialist”

·  Describes an “open-outcry” trading system

·  Describes the steps in post-trade processing

·  Describes straight-through processing

Structure of Financial Markets_Part _1

Structure of Financial Markets_Part _2

This lecture covers short-term debt securities, repo markets.

This lecture:

·  Describes the characteristics of fixed income instruments

·  Defines term, principal, interest rate and secured vs. Unsecured

·  Describes the types of deposits (demand, notice and fixed-term)

·  Defines a reference rate

·  Describes a credit facility

·  Discusses syndication

·  Describes the Eurocurrency market, particularly the Eurodollar market

·  Defines “add-on” interest

·  Defines LIBOR

·  Describes different types of money market securities

·  Explains the calculation of the bond-equivalent yield of a T-bill

·  Defines a commercial paper and a promissory note

·  Defines banker’s acceptance and certificate of deposit

·  Defines basis point

Structure of Financial Markets_Questions

The Money Markets

Lectures 42-45 gives a comparison of different bond markets of different countries.

These lectures:

·  Defines market-making and origination

·  Describes the various market participants by group

·  Defines bid-price and offer-price

·  Describes on-the-run, off-the-run and benchmark securities

·  Defines a sinking fund

·  Defines property clauses and call provision

·  Defines types of foreign bonds (Yankee, Bulldog, Samurai, Alpine and Matador)

·  Describes the process of underwriting a new issue

·  Defines underwriter, lead manager and book-runner

·  Defines a fixed-price re-offer mechanism

·  Defines a bought-deal

·  Describes the characteristics of the Eurobond market

·  Defines the different day-count conventions

·  Defines default and recovery rates

·  Describes how a bond’s rating affects the yield spread

  • Describes the role of Rating Agencies
Bond Markets_Part_1

Bond Markets_Part_2

Bond Markets_Part_3

Bond Markets_Questions

This lecture talks about foreign exchange market, its conventions, cross rates, currency swaps, interest rate parity.

This lecture:

·  Defines an exchange rate

·  Describes the interbank market

·  Defines decentralized, continuous, open bid and double-auction

·  Defines direct and indirect-term quotations

·  Defines the trading term “big figure”

·  Defines a cross-rate and a cross-trade

·  Discusses central bank intervention

·  Discusses spot and forward markets

·  Defines currency swap rate, forward premium and forward discount

·  Explains the calculation of the forward premium or discount

·  Defines covered-interest arbitrage / interest rate parity

·  Describes a typical foreign exchange operation

·  Defines front, middle and back office

The Foreign Exchange Market

This lecture gives an introduction to stock markets, stock market indices, primary and secondary markets.

This lecture:

·  Describes the common characteristics of a stock

·  Defines IPO, primary issue, and secondary offering

·  Discusses shareholder rights

·  Defines dividend and ex-dividend trading

·  Defines market capitalization

·  Discusses stock indices

·  Defines the dividend discount and Gordon growth models of stock valuation

·  Discusses the types of stock market participants

·  Defines listing and float

·  Defines T+1 and T+3 settlement

·  Defines private placement and seasoned new issue

·  Describes the process of an IPO

·  Describes the process of a private placement

·  Describes the role of exchanges

·  Describes the role of the OTC market

·  Defines the bid/offer spread

·  Discusses margin trading

·  Discusses short-selling and borrowing stocks

Stock Markets

This lecture talks about the futures markets, options on futures, specifications of contracts, and the use of futures for hedging, mark-to-market.

This lecture:

·  Defines a futures contact

·  Discusses some of the reasons that futures markets exist

·  Defines open-outcry, contact size, tick size, limit up, limit down, expanded limit, initial margin, maintenance margin, mark-to-market, daily settlement, delivery month, offsetting transaction, volume and open interest

·  Discusses types of orders in futures markets

·  Discusses the importance of standardization in futures contracts

·  Discusses the role of the clearing house

·  Discusses the process of physical settlement

·  Defines and discusses the various types of orders

·  Discusses the exercise of an option on a futures contract

·  Discusses the various participants in futures markets: hedgers, speculators, managed futures investors

·  Explains the calculation of initial margin and change in margin due to market movements

Defines calendar spread and basis
The Futures Markets

This lecture talks about the structure of the commodities market, its specific features, such as delivery and settlement methods.

This lecture:

·  Defines “on the spot” and “settlement of difference”

·  Discusses the uniqueness of the gold market

·  Defines contango, backwardation, carrying cost (cost of carry) and lease rate

·  Discusses the impact of shortages on commodity prices and the history of short squeezes

·  Defines short squeeze and demand for immediacy

·  Discusses the convenience yield theory

·  Discusses the decomposition of risk factors in commodities

·  Discusses the importance of non-normality of commodity price distributions

Commodities Markets

This lecture discusses about the energy markets and risks involved with the same.

This lecture:

·  Discusses the size of markets for energy

·  Discusses the various energy futures markets

·  Lists the major energy futures contracts

·  Describes various options on energy

·  Discusses using futures markets to hedge energy risk

·  Discusses physical delivery in energy markets

·  Defines basis contracts in OTC energy markets

·  Discusses the role of the Singapore Market

·  Discusses the role of the European Market

·  Discusses the role of the North American OTC energy market

·  Discusses the role that Platts plays in the energy market

·  Discusses the Coal market

·  Discusses the weather derivatives market

·  Discusses the emergence of green trading

·  Discusses the issues of future energy trading

Energy Markets

Financial Markets- Quiz
20 questions
Conclusion PRM-I
1 Lecture 16:28
Conclusion PRM-I
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