Model option payoff diagrams and hedge Greeks for one strategy
A risk dashboard or validation memo with metrics, stress tests, breach logic, and management actions.
Build
Model, memo, dashboard, notebook, or deck.
Explain
Clear assumptions, insight, and recommendation.
Show
Resume bullet and interview story.
What you are doing
You are working as a Investment Banking. Your manager asks you to use Derivatives to answer a real business or investment question and present a decision-ready output.
Show that you can apply Derivatives in a practical analyst workflow, not only explain the theory.
What to make
A risk dashboard or validation memo with metrics, stress tests, breach logic, and management actions.
Deliverables
- Brief
- Model or notebook
- Charts or dashboard
- Resume bullet
- Source and assumption log
- One-page executive summary
- Final memo PDF
How to start
- Define the portfolio, exposure, product, or process under review.
- Choose risk metrics such as VaR, drawdown, volatility, PD/LGD, limits, or loss frequency.
- Set data assumptions and limitations upfront.
Step-by-step execution
- Clean the dataset and define risk factors.
- Calculate baseline risk metrics and limit usage.
- Run stress scenarios and compare against risk appetite.
- Create a dashboard or memo explaining breaches and trends.
- Recommend actions such as hedge, reduce, monitor, escalate, or change controls.
Data and sources
- NSE/BSE market data
- RBI/SEBI circulars where relevant
- Public historical price data
- Synthetic loss-event dataset
- Company risk disclosures
Tools to use
- Excel or Python
- Excel or Google Sheets
- PowerPoint / Google Slides
- Public filings
Quality rubric
- Risk metric selection matches the exposure.
- Stress scenarios are explained.
- Dashboard separates signal from noise.
- Limit breach logic is auditable.
- Recommendations are practical and prioritized.
Resume bullet
Built a a risk dashboard or validation memo with metrics, stress tests, breach logic, and management actions. for Derivatives, using Excel or Python to convert raw information into a decision-ready finance output.
Interview talk track
- Problem: explain the business question and why it matters for Investment Banking.
- Method: describe the data collected, assumptions made, and analysis performed.
- Decision: state the recommendation, key risk, and what would change your view.