Questions on Risk Management

Hi,

I am a current student studying Math and Econ. After I graduate from my current school, I will be studying Operations Research two more years. I have been pursuing the actuarial field, but I also want to break into the finance industry at the same time.

1) I have passed two actuarial exams (P and FM) and will take the third one (MFE) in March that deals with options pricing (Black-Scholes, Ito calculus, delta hedging, etc). Would those exams be helpful if I want to get an internship in the risk management division within an investment bank?

2) I have heard that the FRM exams would be beneficial for the risk management team. If I wanna get an internship in the risk management division within a bank, should I take the FRM Part 1 or CFA level 1? How is the difficult of the FRM Part 1 compared to the actuarial exams?

3) What kinds of skills/qualities are desirable for the risk management?

4) I am taking an advanced econometrics class next semester where I will be learning SAS and maybe R. The final project in that class is to build an econometric model. What kinds of topics within investment/risk management would be good for the econometric modeling experience?

5) Do you have any other advice for recruiting?

Thank you very much.

 
Best Response

You need to refine your ask. RM divisions cover a lot of very different fields eg:

  1. Compliance people worried about regulation, often lawyer-like stuff
  2. Internal audit and ops risk people worried about policy breaches, fraud
  3. Credit people worried about counterparty exposures - and often the Credit team has a number of sub-teams eg those who cover trading books, those who cover underwriting, those who cover particular sectors, central credit teams who deal with the systems that collate and monitor exposures
  4. Market risk people worried about the current book of market exposures and where that book could move in an n-standard deviation shift, fat tails, other stats-based stuff

And that's a non-exhaustive list.

RM covers a wide range of skillsets and usually is full of teams who have nothing to do with each other.

Those who can, do. Those who can't, post threads about how to do it on WSO.
 
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would you say that having an FRM designation makes a meaningful difference for someone trying to get into risk management in general?

What's an FRM designation?

Those who can, do. Those who can't, post threads about how to do it on WSO.
 

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Those who can, do. Those who can't, post threads about how to do it on WSO.

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