Bachelor's thesis (Turku University of Applied Sciences) Degree Program in Business Management

parts of the research are wholly based on the observations derived from annual 
financial and risk management reports. 
Empirical investigation has not just revealed implementation techniques that 
could be successfully utilized in investment risk management strategies of 
professional banking, rather uncovered interesting details about the state of 
financial affairs of commercial banks involved in the study and the way they 
comply their operational activities with the upcoming changes in financial 
regulations.
While the final summarizing chapters of the Thesis project tend to arrive at 
objective conclusions, commonly they serve as a mere indication of how 
commercial banks handle their investment operations in response to general 
volatility of financial markets in the course of a certain time frame. In other 
words, taking into consideration new observational data might alter or revise the 
conclusions completely. 
KEYWORDS: 
Financial Markets Commercial Banking Investment Banking Liquidity Risk Management 
Investment Portfolio Diversification Derivatives Financial Instruments Capital Central Bank 

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CONTENT 
1 INTRODUCTION 
6
 
1.1
Theoretical and practical value of current research 
6
 
1.2
Research purposes of the thesis work 
7
 
1.3
Structure of the thesis work 
8
 
2 METHODOLOGY 
10
 
2.1
Review of the research process 
10
 
2.2
Research methods applied in the course of the Thesis work 
12
 
2.3
Reliability, Validity and Generalizability 
15
 
3 THEORETICAL BACKGROUND 
17
 
3.1
Portfolio Management Theories 
17
 
3.2
Credit Ratings 
19
 
3.3
Value at Risk (VaR) 
20