utions and regulators have made substantial progress in meeting the challenges posed by recent changes in financial markets and risk profiles including the expansion of derivatives activities. Nonetheless, if we are to take full advantage of opportunities to strengthen risk management practices for both derivatives and more traditional financial activities, we have more work ahead of us. Required: 1. Appraise the revolution of derivatives with relation to risk management in financial institutions 2. Evaluate methods involved in choosing risk assessment tools for derivatives trading and management. 3. Demonstrate the use of derivatives in risk management by financial institutions