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This course provides an overview of the theory and practice of financial risk management. It will offer an introduction to derivative instruments and markets, focusing on the tools for analysing and valuing derivative securities such as options, futures, and swaps. It also explores how these instruments can be utilized for arbitraging, speculation, and hedging purposes. This course includes risk management in the areas of interest rate risk, currency risk, commodity price risk and environmental risk. It also examines key financial debacles, and the lessons learned from them, alongside an in-depth overview of the derivatives markets in Australia and New Zealand.
This course examines how financial institutions, corporations, and investors identify, measure, and manage financial risks. The course introduces quantitative methods for analysing market, interest rate, credit, foreign exchange, and other financial risks, and explores the use of derivative instruments for hedging and risk management. Students apply these techniques to portfolios of stocks, bonds, and other financial assets.Emphasis is placed on practical applications through case studies, real-world financial events, and industry-style problems inspired by professional risk management qualifications such as the FRM and CFA programs.
The outcomes of the course are:1. Identify the major sources of financial risk faced by financial institutions, corporations, and investors.2. Apply quantitative methods to measure and analyse market, interest rate, credit, and exchange risk.3. Evaluate the risk and return characteristics of financial assets and investment portfolios.4. Use derivative instruments, including futures, options, and swaps, for hedging and risk management purposes.5. Assess risk exposures using industry-standard tools such as Value-at-Risk (VaR), stress testing, and scenario analysis.6. Critically analyse real-world risk management practices and financial risk events using professional and academic frameworks.
MBAZ601, MBAZ603
FINC312; FINC612; FINC623
Students must attend one activity from each section.
Chunxiao Lu
The ‘45% rule’ does not apply to this course. That is, students do not need to reach 45% weighted average across invigilated assessments. Please refer to https://learn.canterbury.ac.nz/course/view.php?id=7744 for further information.Homework:Students are required to complete and submit weekly homework assignments from Week 2 to Week 11 before attending the corresponding lecture. Homework must be submitted in person and handwritten submissions only will be accepted. Students are expected to demonstrate a reasonable attempt at all assigned questions.Each homework assignment is worth 2.5% of the final course grade. The best eight out of ten homework submissions will be counted towards the final mark, for a total of 20%.Case Study Discussions:During the final hour of each class, students will participate in small-group discussions based on real-world financial risk management case studies. To receive the full 10%, students must actively participate in at least 5 of the 11 in-class discussions. Active participation involves contributing meaningfully to group discussions, sharing ideas, and engaging constructively with classmates.Term Test:A two-hour term test will be held during the scheduled lecture time in the usual lecture room. The test is closed book and will assess material covered in Weeks 1–5.Final Examination:The final examination is worth 45% of the course grade. The examination is three hours in duration and closed book. It will cover material from the entire course, with greater emphasis on topics covered after the term test. Material from Weeks 1–5 remains examinable and provides important foundations for later topics.The date, time, and venue of the final examination will be determined by the University following the completion of enrolment. Students should consult the Examinations website for the official examination timetable.Students are responsible for ensuring that there are no clashes between their tests and examinations. Any timetable conflicts should be reported to the Course Coordinator as early as possible.Students with Accessibility ChallengesTe Ratonga Whaikaha | Student Accessibility Service provides academic support and specialist resources to students living with accessibility challenges. For information about these services, please email sas@canterbury.ac.nz or refer to: https://www.canterbury.ac.nz/life/accessibilitySpecial ConsiderationsUC has a process which allows students to apply for Special Consideration for poor performance in an assessment or a missed assessment due to unforeseen circumstances at the time of the assessment. Special Consideration is not an extension. If you want an extension for an assignment or essay, contact your Course Coordinator.Guidelines for the Use of AI in CourseworkThe use of AI may or may not be permitted in courses. Within a course, permission may vary by assignment. It is the responsibility of the student to inform themselves about assessment conditions and submit workthat is their own and that properly acknowledges the work of other people and tools, including generative artificial intelligence tools.It is important to familiarise yourself with the UC Misconduct Procedure Guide for Students. Examples of academic misconduct include, but are not limited to:Where a student uses a generative artificial intelligence (AI) tool for an assessment in a manner that is not expressly permitted or fails to acknowledge the use of a generative AI tool as instructed.Assessment in Te Reo MāoriIn recognising that Te Reo Māori is an official language of New Zealand, the University provides for students who may wish to use Te Reo Māori in their assessment. If you intend to submit your work in Te Reo Māori you are required to do the following: Read the Assessment in Te Reo Māori Policy and ensure that you meet the conditions set out in the policy. This includes, but is not limited to, informing the Course Coordinator 1) no later than 10 working days after the commencement of the course that you wish to use Te Reo Māori and 2) at least 15 working days before each assessment due date that you wish to use Te Reo Māori.
Jorion, P; Financial Risk Manager Handbook: FRM Part I / Part II ; Hoboken, NJ: John Wiley & Sons, 2010 (An electronic version is available through the University of Canterbury Library: GARP (Global Association of Risk Professionals) & Jorion, P. (2010). Financial Risk Manager Handbook: FRM Part I / Part II. John Wiley & Sons. Available via ProQuest).
Marthinsen, J.E; Risk Takers: Uses and Abuses of Financial Derivatives ; Walter de Gruyter, 2025.
Additional ReadingsA weekly reading list, including supplementary articles, case studies, and practice materials, will be provided.
Domestic fee $1,198.00
International Postgraduate fees
* All fees are inclusive of NZ GST or any equivalent overseas tax, and do not include any programme level discount or additional course-related expenses.
For further information see Department of Economics and Finance .