This unit provides an overview of investment and risk, and proposes strategies to manage the risks of different investment practices. Students will discriminate between different types of risks encountered by contemporary organisations and investigate models designed to help manage those risks. Students will apply statistics to assess distribution of asset returns, measure risk, measure the components of total risk, measure the risk in portfolio construction and management, the efficient market concept, option pricing models and forecast volatility.

Unit details

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Learning Outcomes

On successful completion of this unit, students will be able to:
  1. Deliberate upon the distribution of asset return and the measurement of risk, to substantiate conclusions tailored to meet the requirements of a range of sectors/settings;  
  2. Quantify the relationship between returns and different types of risk to value the asset and provide justified recommendations;  
  3. Contextualise the concepts of market efficiency and random walk hypothesis clearly and coherently as they are evidenced in contemporary settings;  
  4. Create an optimum portfolio based on the risk and correlation of individual assets to provide diversification benefits;  
  5. Adapt the principles of options and option pricing models to analyse and justify recommendations for effective financial decision making for known and changing contexts; and  
  6. Estimate and forecast volatility in financial time-series, justifying an optimal recommendation.  


Melbourne campuses

Students studying under the VU Block Model.

Assessment type Description Grade
Assignment Group Assignment 1 20%
Assignment Group Assignment 2 20%
Assignment Group Assignment 3 20%
Test Online Test 40%

Other locations

Assessment type Description Grade
Test Multiple Choice and Short Answers 20%
Assignment Assignment 20%
Examination Final Examination 60%

Required reading

Quantitative financial risk management.
Miller, M. B. (2019).
Hoboken, New Jersey: John Wiley & Sons, Inc. (Wiley finance series).

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