Opis: Mastering Interest Rate Risk Strategy - Victor Macrae

Financial institutions, private and public companies and governments can lose vast amounts of money from even minor changes in interest rates. Because of this, complex financial instruments have been developed to mitigate these exposures. But what happens when organisations hedge themselves to ill-advised and ill-formulated financial management strategies? Based on a proven analytical method, Mastering Interest Rate Risk Strategy explains, step-by-step, how to set up and run a sound interest rate risk strategy. Influenced by the author's work with leading companies and tested with banks, the book will help readers bring risk under control, raise profits and ensure healthy cash flows. Mastering Interest Rate Risk Strategy: Shows you how to mitigate interest rate risk using the most advanced risk management techniques Provides you with an analytical method that is proven both academically and in practice Uses examples and real life cases to support the transfer of knowledge and skills Interest rate changes will affect most firms because they will have interest bearing assets or liabilities. As a result, interest rate movements have an unfavourable impact and managing interest rate risk can be highly beneficial for the firm. But high-profile derivative blunders show that this is no easy task. In Mastering Interest Rate Risk Strategy, Victor Macrae shows you how to avoid the mis-selling of derivatives and derivatives blunders and how to set up an optimal interest rate risk strategy. Mastering Interest Rate Risk Strategy includes: * Past derivatives blunders and how you can learn from them * A proven analytical method for strategy formulation * Hedging theory * Bank financing for non-financial firms * How movements in the financial markets may affect the firm * Financial statement impact of interest rate risk * The working and risks of using swaps, FRA's, caps, floors, collars and swaptions 'This is a wonderful and easy to read tour of interest rate risk and its management, and mismanagement. Anyone who wants to better understand why and how non-financial firms should be dealing with interest rate risk should read this book.' Gordon M. Bodnar, Professor on International Finance, Johns Hopkins University 'Macrae's guide is an excellent cookbook for financial managers. With many cases and examples, this book offers guidance in robust risk management techniques.' Abe de Jong, Professor of Corporate Finance and Corporate Governance at Rotterdam School of Management, Erasmus UniversityContents Preface Introduction Part 1 KEY LEARNING POINTS FROM PAST DERIVATIVES BLUNDERS 1 Introduction Newspaper headlines Five categories of derivatives blunders Part 2 UNDERSTANDING THE FIRM'S EXPOSURE TO INTEREST RATE RISK 2 Four sources of exposure to interest rate risk Introduction Current or future interest bearing assets or liabilities Variable interest rate now or in the future 3 Bank financing as primary source of exposure Introduction Current account overdraft Medium and long-term loans Collateral Repayment methods Pricing Part 3 MEASURING THE IMPACT OF INTEREST RATE RISK ON THE FIRM 4 The financial markets Introduction The yield curve The money market The capital market 5 Financial statement impact from interest rate movements Introduction Liquidity Solvency Financial covenants Cash cycle Profitability Share price ratios Part 4 HEDGING MAKES SENSE UNDER SPECIFIC CIRCUMSTANCES ONLY 6 Introduction Reducing expected taxes Minimizing financial distress costs Reducing agency costs Controlling managerialism Part 5 SELECTING THE BEST POSSIBLE DERIVATIVE 7 Interest rate derivatives Introduction Exchange-traded versus OTC Linear derivatives versus options Sources of exposure and matching derivatives 8 Linear derivatives Introduction Interest rate swap FRA 9 Options Introduction Cap Floor Collar Swaption Part 6 How to formulate the optimal strategy: The analytical method 10 Introduction Central case Trader: a new financing arrangement The analytical method in full The analytical method step by step Afterword Appendix I: Central case Trader Appendix II: Proof of the analytical method Resources Glossary Index

Szczegóły: Mastering Interest Rate Risk Strategy - Victor Macrae

Tytuł: Mastering Interest Rate Risk Strategy
Autor: Victor Macrae
Producent: FT Publishing International
ISBN: 9781292017563
Rok produkcji: 2015
Ilość stron: 232
Oprawa: Miękka
Waga: 0.37 kg

Recenzje: Mastering Interest Rate Risk Strategy - Victor Macrae