English   Danish

2017/2018  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
  • Ken L. Bechmann - Department of Finance (FI)
Further information: https:/​/​studentcbs.sharepoint.com/​CEMS/​Pages/​Valgfag-paa-CBS_DK.aspx
Main academic disciplines
  • Finance
Last updated on 30-06-2017

Relevant links

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.
Financial Risk Management in Shipping:
Exam ECTS 7,5
Examination form Written sit-in exam on CBS' computers
Individual or group exam Individual exam
Assignment type Case based assignment
Duration 4 hours
Grading scale 7-step scale
Examiner(s) One internal examiner
Exam period Winter
Aids Limited aids, see the list below:
The student is allowed to bring
  • USB key for uploading of notes, books and compendiums in a non-executable format (no applications, application fragments, IT tools etc.)
  • Any calculator
  • Books (including translation dictionaries), compendiums and notes in paper format
The student will have access to
  • Access to CBSLearn
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
At all written sit-in exams the student has access to the basic IT application package (Microsoft Office (minus Excel), digital pen and paper, 7-zip file manager, Adobe Acrobat, Texlive, VLC player, Windows Media Player). PLEASE NOTE: Students are not allowed to communicate with others during the exam : Read more about exam aids and IT application packages here
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.


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.
Feedback during the teaching period
The teaching will be interactive and attempt to involve the students through discussions of the content of the course and of smaller exercises. The students will this way receive some feedback on their understanding of the core topics. The students will also receive a solution to the final exam with some feedback to their general performance at the exam.
Student workload
Teaching 33 hours
Preparation 147 hours
Exam 26 hours
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 30-06-2017