Financial Risk Management

Company name - LLYODS BANK

Write a risk report and prepare presentation slides in groups on a company specified by the module leader.

As a group you are required to write a risk report on a specific company for an investor who has £100,000 to invest. You are working for the investor so the report should be neutrally worded. This is not a sales report where your aim is to persuade the investor to take a position. Instead it is an honest evaluation of risk to enable the investor to make the correct decision for them self. You are not required to provide a recommendation. The aim of the investor is to make a positive return from their capital, therefore, you should attempt to identify risks which will affect the company and might lead to a reduction in share price. You should also, where appropriate, use numerical techniques to quantify the risks of the investment. You are free to arrange the report in any way you like, however, the first page must contain a title and an executive Summary (no more than 300 words) describing your key findings.

The report should include a quantitative analysis of worst case scenarios for the investor. In particular if the investment goes badly, how much they are likely to lose. In doing this, you should present your calculations and justify your approach.

Further to the above, you will also need to provide slides at the end of the risk report (after appendixes - if any) summarizing to the investor the report's analysis and key findings. The first slide should contain the title and the students' names while the number of slides should not be more than 8. Do not attach files - you will need to copy and paste the presentation slides at the end of the report (see image in the "Further Guidance" Section).

There is a range of risks that may affect the company and you should attempt to identify and describe the specific risks. Depending on the firm these may include: operational risk*, credit risk, risks to the sector*, market risk, liquidity risk and others. You may also wish to consider if any of these risks may easily be reduced by the investor.

* note no numerical analysis is necessary for these risks due to difficulty of obtaining data

Advice and Guidance
The report should be no longer than 12 pages (A4, size 12 font, 1.5 line spacing, 1 inch borders) including figures, calculations, references and title/summary page. Appendixes may be used where necessary to include data/calculations and are not included in the page count**. It is sufficient for one member to submit the report on Blackboard.