A TIME-VARYING RISK PREMIUM IN THE TERM STRUCTURE OF BULK SHIPPING FREIGHT RATES

In this paper, the authors present an argument for rejecting the applicability of the expectations theory in bulk shipping freight markets. Based on logic and maritime economic theory alone, the authors show that the risk premium must be both time varying and dependent on freight market conditions and the duration of a period time charter. Where possible, the signs of the risk premium that can be attributed to the various risk factors are derived. The authors conclude that while the theoretical net risk premium will usually be negative, in a strong freight market, this may change for a short-term period charter.

  • Availability:
  • Authors:
    • Adland, R
    • Cullinane, Kevin
  • Publication Date: 2005-5

Language

  • English

Media Info

Subject/Index Terms

Filing Info

  • Accession Number: 01005350
  • Record Type: Publication
  • Source Agency: UC Berkeley Transportation Library
  • Files: BTRIS, TRIS
  • Created Date: Oct 14 2005 8:30AM