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2023/2024  BA-BISHO2002U  Risk Management

English Title
Risk Management

Course information
Language English
Course ECTS 7.5 ECTS
Type Mandatory (also offered as elective)
Level Bachelor
Duration One Quarter
Start time of the course Autumn, Second Quarter
Timetable Course schedule will be posted at calendar.cbs.dk
Study board
Study Board for BSc in International Shipping and Trade
Course coordinator
  • Lars Christian Larsen - Department of Finance (FI)
Main academic disciplines
  • Finance
  • Economics
Teaching methods
  • Blended learning
Last updated on 30-11-2023

Relevant links
Learning objectives
At the end of the course, the students must be able to
  • Describe the main sources of risk in the shipping industry
  • Discuss how risk is identified, measured, reported and managed and calculate relevant risk measures
  • Discuss the role of risk management and real options in value creation
  • Define the financial hedging instruments that are available for shipping firms
  • Discuss and analyze hedging strategies relevant for shipping firm
Examination
Risk Management:
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-point grading scale
Examiner(s) Internal examiner and external examiner
Exam period Winter and 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.)
  • An approved calculator. Only the models HP10bll+ or Texas BA ll Plus are allowed (both models are non-programmable, financial calculators).
  • Language dictionaries in paper format
The student will have access to
  • Access to Canvas
  • Access to the personal drive (S-drive) on CBS´ network
  • Advanced IT application package
Make-up exam/re-exam Oral exam based on written product
In order to participate in the oral exam, the written product must be handed in before the oral exam; by the set deadline. The grade is based on an overall assessment of the written product and the individual oral performance.
Size of written product: Max. 10 pages
Assignment type: Case based assignment
Release of assignment: The Assignment is released in Digital Exam (DE) at exam start
Duration: 20 min. per student, including examiners' discussion of grade, and informing plus explaining the grade
Examiner(s): If it is an internal examination, there will be a second internal examiner at the re-exam. If it is an external examination, there will be an external examiner.
Description of the exam procedure

Case material is distributed to the students 48 hours before the written exam. The questions to the case will given at the written exam. 

 

 
Course content, structure and pedagogical approach

 

The uncertainty involved in ownership and operation of ships has become quite important in recent years as stakes are higher for owners, operators and investors. Agents in the shipping industry face risk from the international and competitive environment in which they operate. Risk emanate from fluctuations in e.g. freight rates, bunker prices, or ship prices as well from the choice of contract during ship operation, finance and credit terms.
 
The course will start with identifying the main sources of risk relevant for the shipping industry. Measuring of risk through various risk measures, including the commonly used Value-at-Risk, will be introduced and finally, possible hedging instruments including a range of different derivatives are introduced and their use in different hedging strategies will be covered.
 
The course builds on prerequisites from Maritime Economics, Maritime Law, Statistics and Corporate Finance.
Description of the teaching methods
"The course on Risk Management uses Excel extensively to estimate, measure, and simulate risk. Therefore, some time is spent on introducing different tools and techniques in Excel. It would be very relevant to develop videos introducing these tools and techniques to the students such that they can work with this on their own at home. The plan is to develop three to four such videos.

In addition, several exercises and smaller cases (several previous exam questions) are assigned to the students as homework during the course. Given that several of the questions are quantitative, quizzes can be used to provide feedback to the students on the homework. In addition, this could hopefully also help to make the students more prepared for the subsequent discussions in class. The plan is to develop four to five quizzes.
The course on Risk Management uses Excel extensively to estimate, measure, and simulate risk. Therefore, some time is spent on introducing different tools and techniques in Excel. It would be very relevant to develop videos introducing these tools and techniques to the students such that they can work with this on their own at home. The plan is to develop three to four such videos.

In addition, several exercises and smaller cases (several previous exam questions) are assigned to the students as homework during the course. Given that several of the questions are quantitative, quizzes can be used to provide feedback to the students on the homework. In addition, this could hopefully also help to make the students more prepared for the subsequent discussions in class. The plan is to develop four to five quizzes.
"Classes on are on campus
Feedback during the teaching period
quizzes will be used to provide feedback to the students on the homework. In addition, this could hopefully also help to make the students more prepared for the subsequent discussions in class. The plan is to develop four to five quizzes.
Student workload
lecture 42 hours
preparation 188 hours
exam + preparation 37 hours
Expected literature

The curriculum will be uploaded prior to the course on Canvas but will most likely be:
 

  • Kavussanos, Tsouknidis and Visvikis:

    Freight Derivatives and Risk Management in Shipping,

    Routledge, second edition, 2021
  • Various research articles (theoretical and empirical)
  • Cases
  • Other readings like newspaper articles and articles for practitioners
Last updated on 30-11-2023