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2015/2016  KAN-CCMVV3030U  Financial Risk Management in Shipping

English Title
Financial Risk Management in Shipping

Course information
Language English
Course ECTS 7.5 ECTS
Type Elective
Level Full Degree Master
Duration One Semester
Start time of the course Autumn
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for MSc in Economics and Business Administration
Course coordinator
  • Claus Parum - Department of Finance (FI)
Teacher: Nina Lange - nl.fi@cbs.dk
Kontaktinformation: https:/​/​e-campus.dk/​studium/​kontakt eller Contact information: https:/​/​e-campus.dk/​studium/​kontakt
Main academic disciplines
  • Finance
Last updated on 11-08-2015
Learning objectives
To achieve the grade 12, students should meet the following learning objectives with no or only minor mistakes or errors: At the end of the course, the students are expected to be able to:
  • Describe the central elements of financial risk management and apply different risk measures
  • Describe the main sources of risk in the shipping industry
  • Discuss advantages and disadvantages of hedging
  • Define, discuss and analyze financial hedging instruments and hedging strategies relevant for shipping firms
Course prerequisites
It is required that the student has knowledge of finance and financial markets corresponding to a basic undergraduate course in finance.
Examination
Financial Risk Management in Shipping:
Exam ECTS 7,5
Examination form Written sit-in exam
Individual or group exam Individual
Assignment type Case based assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Autumn
Aids allowed to bring to the exam Limited aids, see the list below:
  • Written sit-in-exam on CBS' computers
  • Books and compendia brought by the examinee
  • Allowed dictionaries
  • Allowed calculators
  • Notes in paper format brought by the examinee
  • Access to personal drive (S-drive) on CBS' network
  • USB key to upload your notes before the exam
Make-up exam/re-exam
Same examination form as the ordinary exam
If the number of registered candidates for the make-up examination/re-take examination warrants that it may most appropriately be held as an oral examination, the programme office will inform the students that the make-up examination/re-take examination will be held as an oral examination instead.
Description of the exam procedure

The examination of this course consists of a final four hour written exam without internet access. 48 hours before the exam, case material for the exam will be distributed. The exam is graded according to the 7-point grading scale.

PC exam on CBS computers.
It is not allowed to bring your own PC and printer.
No access to the internet and LEARN.
Access to personal S:/drive.
Before the exam starts information can also be uploaded from a USB-key to PC, then the USB-Key should be put away during exam.
Course content and structure

As freight rates, fuel prices, interest rates etc. have become increasingly volatile, risk management has become even more important for the shipping industry. In this course, financial risk management will be defined as the process by which various risk exposures are identified, measured, and controlled. The course will start with identifying the main sources of risk relevant for the shipping industry. Based on this, possible risk measures including the commonly used Value-at-Risk will be introduced. Finally, possible hedging instruments including a range of different derivatives are introduced and their use in different hedging strategies will be covered. Also credit risk and real options analysis is covered in the course.
Teaching methods
The course will consist of usual lectures, exercises, and case analyses and discussions. The exercises will integrate Excel as a very useful tool in risk management for example in calculating risk measures and in analyzing different hedging strategies. The cases will illustrate the practical applications of the theory focusing on the shipping industry. It is assumed that students participate actively in the lectures – and especially in these case analyses and discussions.
Expected literature
  • Chapters in Alizadeh, Amir H. and Nikos K. Nomikos: Shipping Derivatives and Risk Management, Palgrave Macmillan, 2009.
  • Various research articles (theoretical and empirical)
  • Cases
  • Other readings like newspaper articles and articles for practitioners
Last updated on 11-08-2015