Module BUSI41415: FINANCIAL RISK MANAGEMENT (DL)

Department: Economics, Finance and Business (Business)

BUSI41415: FINANCIAL RISK MANAGEMENT (DL)

Prerequisites

• None.

Corequisites

• None.

Excluded Combination of Modules

• None.

Aims

• To build on the core model 'Managing Finance' by:
• providing a critical analysis of the motivations for risk management, including taxation, financial distress costs and executives' incentives;
• examining at an advanced level the assessment and management of the corporation's exposure to various sources of financial risk, including the use of internal hedging techniques, financial derivatives and insurance.

Content

• Introduction
• Sources of Financial Risk and Forecasting Market Movements
• The Practice of Hedging
• Internal Risk Management
• Hedging Financial Risk with Derivative Instruments
• Interest Rate Risk Management
• Foreign Exchange Risk Management

Learning Outcomes

• By the end of the module students will be able to:
• understand and critically assess the different motivations for corporate hedging; how knowledge of hedging can improve decision making; and how hedging affects the firm's stakeholders;
• understand how derivative markets can be used in hedging corporate financial risk, and identify and critically assess the limitations and potential dangers of using derivatives;
• critically appreciate the implications of the recent academic literature for current management practice.

• By the end of the module students will be able to:
• identify and evaluate which financial risks corporations should hedge, applying critical discrimination in appraising the impact of different motivations upon the hedging decision;
• critically apply different techniques to measure financial risk, including a variety of tools to estimate risk exposure and hedge ratios.

Modes of Teaching, Learning and Assessment and how these contribute to the learning outcomes of the module

• The module is delivered in discrete Units. These are designed to enable the learning outcomes to be achieved through a combination of specially written material, directed reading, reflection through self-assessed assignments and guidance for further reading. Module tutors provide feedback on formative work and are available for individual consultation as necessary (by email, telephone, post or fax).
• The written assignment will test students’ understanding of relevant concepts and their ability to apply and interpret what they have learned to the analysis of a particular issue in depth.

Teaching Methods and Learning Hours

Summative Assessment

Formative Assessment:

None.

■ Attendance at all activities marked with this symbol will be monitored. Students who fail to attend these activities, or to complete the summative or formative assessment specified above, will be subject to the procedures defined in the University's General Regulation V, and may be required to leave the University