Risk & Return

Course Description

Risk and Return is a course designed to give a better understanding of risk and how it affects investments in fixed rate investments such as annuities and variable rate investments in variable annuities.

The course covers seven different kinds of risks: Inflation Risk, Interest Rate Risk, Business Risk, Credit Risk, Market Risk, Liquidity Risk and Portfolio Risk. If the type of risk discussed affects an investment, it is also discussed and how to avoid or diminish its affects. The course touches on financial planning to avoid or diminish such risks. Standard deviation is explained along with covariance and correlation coefficients. It also goes into asset allocation and diversification.

The course then moves into treating risk and trying to control some of the affects of risk. Risk control alternatives are discussed. Risk financing option are discussed and its alternatives.

The course goes from risk, as it relates to investments, to an introduction on how it affects insurance coverage. The Law of Large Numbers is discussed and how an insurance company uses logical things to control their risks and operate successfully.