RSK4803: TOPIC 4
The purpose of Topic 4 is to provide an overview of risk financing concepts as it forms an
integral part of risk financing.
The lectures are important.
The following articles need special attention:

Heine, R. & Harbus, F. 2002. Toward a More Complete Model of Optimal Capital Structure.
Journal of Applied Corporate Finance. Spring, Volume 15. No.1.

Christopher L. Culp, C. 2002. Contingent Capital: Integrating Corporate Financing and
Risk Management Decisions. Journal of Applied Corporate Finance. Spring, Vol 15.1.

Chacko, G., Tufano, P. & Verter, G. 2002. Raising contingent capital: The case of
Cephalon. Journal of Applied Corporate Finance. Spring, Volume 15.1.

Mostert, J. & Mostert, F. 2008. Finite risk insurance as a form of alternative risk transfer.
Corporate Ownership & Control. Vol. 6, No. 1, Fall.
The self-test questions will give a good indication of the type of questions you need to prepare
for the examination. You must focus your studies on gaining insight, as you need to solve
problems and convince the stakeholders of your opinion.
We posted links to videos on how to construct paragraphs and essays to assist in answering
essay type questions. Pay attention to the “action verbs” as the structure of an answer will
differ between a “list” and “discuss/explain/evaluate” question.
In general, we work based on one concept/fact per mark. Stating one fact/concept in ten
different ways will earn one mark – not ten, as we focus on the context when marking and not
on keywords or the volume of the answer. If we allocate ten marks to a question, do not write
three pages – you are wasting time. Please bear in mind that your answer can only be
clear and concise if you know the work.
We do not read between the lines or try to guess what you thought – we mark what we see in
the context of the prescribed material and the question.