Module BUSI49215: FINANCIAL RISK MANAGEMENT (FT)

Department: Economics, Finance and Business (Business)

BUSI49215: FINANCIAL RISK MANAGEMENT (FT)

Tied To

• N1K017: Business Administration (full time), (part-time)
• N1KC17: Business Administration [Finance] (full time), (part time)

Pre-requisites

Corequisites

Excluded Combinations

Aims

• To build on the core module '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

• Learning outcomes will be met through a combination of lectures, groupwork, case studies and discussion, supported by guided reading. 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.