The Financial Risk Manual

The Financial Risk Manual

by John Holliwell

Paperback(REVISED)

$37.00

Product Details

ISBN-13: 9780273624189
Publisher: Financial Times/Prentice Hall Books
Publication date: 02/04/2000
Edition description: REVISED
Pages: 352
Product dimensions: 6.88(w) x 9.62(h) x 1.04(d)

Read an Excerpt

PREFACE:

For our purposes financial risk falls conveniently into four categories:

  • Counteparty risk
  • Funding risk
  • Interest rate risk
  • Currency risk

To understand and be able to manage these exposures is critical for business success, and an essential skill for financiers and advisers. This book explains the nature of these financial risks, and the techniques used in their management.

Table of Contents

About this book xi(2)
How to use this book xiii(2)
Acknowledgements xv
SECTION 1 BUSINESS RISK
1(20)
The fundamentals of risk management
3(18)
SECTION 2 COUNTERPARTY RISK (including credit risk)
21(90)
Due diligence
24(3)
The numbers (key ratios)
27(25)
Lending
52(10)
Credit insurance
62(3)
Trade payments
65(46)
Open account
65(1)
Payment in advance/on delivery
66(2)
Documentary letters of credit
68(17)
Incoterms
85(2)
Collections
87(6)
Bills of exchange/drafts
93(2)
Bonds/contract guarantees
95(10)
Avalising
105(1)
Countertrade
105(4)
Medium- and long-term finance for exporters
109(2)
SECTION 3 FUNDING RISK
111(72)
Business plans
114(2)
Cash flow forecasts
116(3)
Profit and loss forecasts
119(1)
Types of funding
120(18)
Equity
120(3)
Borrowing from banks and elsewhere
123(1)
Mergers and acquisitions
124(3)
Bond markets
127(1)
Rating agencies
128(8)
Project finance
136(2)
Borrowing
138(22)
The documentation (loan agreements)
138(22)
Asset-based financing
160(10)
Confidential invoice discounting
161(2)
Factoring
163(7)
Forfaiting
170(9)
Acceptance credits
179(1)
Negotiating a bill of exchange/draft
180(2)
Advances against collections (bill advances)
182(1)
SECTION 4 DERIVATIVES: THE BASICS
183(16)
Exchange traded derivatives
186(2)
Over-the-counter (OTC) derivatives
188(1)
Risks
189(1)
Futures
190(1)
Options
191(3)
Swaps
194(1)
Equity/index derivatives
194(2)
Commodity derivatives
196(1)
Credit derivatives
196(3)
SECTION 5 INTEREST RATE RISK
199(38)
Variable rate facilities
204(1)
Fixed rate facilities
205(1)
Forward rate agreements (FRAs)
205(7)
Interest rate futures
212(7)
Interest rate options
219(5)
Interest rate caps, collars and floors
224(5)
Interest rate swaps
229(8)
SECTION 6 CURRENCY RISK
237(26)
Spot
242(1)
Invoicing in foreign currency
243(1)
Currency borrowing
244(2)
Forward contracts
246(3)
Currency options
249(6)
Currency collars
255(1)
Currency futures
256(1)
Currency swaps
257(6)
Glossary 263(66)
Index 329

Preface

PREFACE:

For our purposes financial risk falls conveniently into four categories:

  • Counteparty risk
  • Funding risk
  • Interest rate risk
  • Currency risk

To understand and be able to manage these exposures is critical for business success, and an essential skill for financiers and advisers. This book explains the nature of these financial risks, and the techniques used in their management.

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