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FINANCIAL RISK MANAGEMENT
Introduction to Financial Price Risks
Targeted Skill Level: Intermediate
Duration: 1 - 2 hours
COURSE DESCRIPTION
Derivatives. Swaps. Futures. Forwards. These terms are commonplace in business today, but most business managers don't understand them well, if at all. But, far more important than knowing these terms and the instruments they represent is understanding the exposures that have given rise to the practice of financial price risk management. Interactive Directed Learning Model™ provides that understanding and a conceptual framework for managing financial price risks.
GOALS
After completing this course you will be able to:
- Identify the four principle types of financial price risks to which every business is exposed
- Understand the key concepts associated with quantifying a business's exposure to those risks, net of offsetting covariances
- Understand the key concepts associated with identifying a strategy to manage
those risks in a way that is consistent with sound corporate finance theory
- Understand the basics of how natural hedges and financial hedges can be deployed as elements of an effective strategy to manage financial price risks
CASE SIMULATION
In the case simulation, you'll evaluate the financial price risk exposures of two companies: Acme Enterprises, Inc. and InterPacific Flightways. Acme Enterprises Inc. is a multi-national producer of consumer and commercial products. InterPacific Flightways is a commercial airline focusing primarily on passenger traffic within the corridor that runs from the Pacific Northwest to Japan and Southeast Asia. Their traffic is created and supported with a domestic feeder system. You'll see how these two distinctly different companies are exposed to the same types of risks, albeit in different ways that suggest different risk management strategies.
INSTRUCTIONAL PATH CONTENT
- Overview
- Identifying Risk Types:
- Strategic Risks
- Operating Risks
- Insurance Risks
- Financial Price Risks
- Interest Rate Risk
- Currency Risk
- Commodity Risk
- Equity Risk
- Who Should Manage These Risks?
- Investors: Portfolio Theory and Risk Management
- Company's: Modigliani & Miller's Implications
- How Should Companies Manage These Risks?
- Six-Step Process - Identify the Best Bearer of the Risk
- Natural and Financial Hedges
JUST-IN-TIME CONTENT
- Context-sensitive war stories told in-depth by business practitioners
- Context-sensitive questions
- Financial Glossary
- Underlying theories summarized:
- Corporate Governance and Risk Management
- Fundamentals of Corporate Finance
- Mathematics of Risk Management
- Utility of Hedging
- Tax Consequences of Hedging
- Basic Derivatives
- Background theory on financial price risk:
- History of Interest Rate Risk
- History of Currency Risk
- History of Commodity Risk
- Basic Interest Rate Hedging
- Basic Currency Hedging
- Basic Commodity Hedging
- Basic Equity Hedging
CONTINUING EDUCATION CREDITS- NASBA sponsored CPE credits
- Insurance CE credits in selected states
Interactive Directed Learning Model™
This course is available both online and on CD-ROM.
Call us at 610.388.0969 or use our convenient contact form.
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