Advanced Financial Risk Management for Corporations - A Practitioner's Guide

This three-day course presents a practical, case-based approach to financial risk management for corporations, including interest rate, commodity and foreign exchange risks. Through cases derived from real-world situations, delegates will learn how to identify, measure and manage financial risks in a corporate framework. Issues that will be addressed include: increasing firm value through risk management, FAS 133 compliance, budgeting for risk and developing a centralized risk management program.

22-Sep-2008 -- 24-Sep-2008ChicagoUSD$3275
NY Institute of Finance - Chicago9:00am - 4:30pm Instructional Method:
Group-Live
Instructor(s): [ Aaron J. Gould; ] Mon Tue Wed Level: Advanced
CPE Credits: 21.5

Corporate accountants, risk managers, analysts and auditors. Derivatives sales staff covering corporations. Ratings agency and regulatory staff, and others who analyze corporate-wide risk.
No advance preparation required.
Students will be able to:
  • Identify and measure financial risks faced by corporations
  • Model financial risks with practical Excel based tools
  • Assess hedge effectiveness for FAS 133 compliance
  • Develop an effective, risk based hedging program
  • Understand the role that financial risk management plays in a corporation
Introduction to Financial Risk Management, Risk Management Suite, Derivative Products Suite OR equivalent knowledge. Familiarity with FAS 133 and knowledge of Excel. Financial calculator required.
Tools and Rules of Risk Management

Identification and Measurement of Risks

  • Interest rate risk
  • Commodity risk
  • Foreign exchange (FX) risk
  • Credit risk
  • Cash flow vs. fair value risks
  • Measurements of risk; standard deviation, volatility, value-at-risk (VaR), Earnings-at-Risk (EaR), stress testing, etc.

Executing Derivative Transactions

  • Treasury derivatives
  • Interest rate swaps & options
  • FX forwards & options
  • Cross currency swaps
  • Commodity forwards & options
  • Credit charges in derivative transactions

FAS 133 Review

  • Scope and implications
  • Definition of a derivative
  • Types of hedges
  • Assessing hedge effectiveness
  • Measurement of hedge ineffectiveness
  • Relevant emerging issues

Risk Management in Action: Risk Management & Hedging

Hedge Decision Making & Reporting

  • Setting hedge objectives
  • Quantifying risk reduction
  • Reporting results

Interest Rate Risk

  • Hedging anticipated debt issuances and repurchases
  • Hedging floating rate debt
  • Managing fixed vs. floating rate debt mix with swaps

Commodity Risk

  • Managing basis risk
  • Assessing hedge effectiveness using regression

Foreign Exchange (FX) Risk

  • Payables/receivables
  • Hedging foreign denominated inter-company loans and debt
  • Net investment in foreign operations

Pension Risk Management

  • Identify and measure key financial risks
  • Options for managing risks

Credit Risk Management

  • How does credit risk arise?
  • Using credit derivatives

Putting it all Together: Enterprise Risk Management

Portfolio View of Risk

  • Portfolio risk vs. individual risks
  • Effects of correlation
  • Centralized risk management
  • Portfolio VaR

Developing a Hedge Program

  • Risk identification
  • Setting hedge objectives
  • Determine hedge horizon
  • Quantify risk reduction
  • Reporting results
  • FAS 133 compliance

Financial Risk Management: Best Practices

    Does Risk Management Increase Shareholder Value?

Clients who register for this course will receive a complimentary 6 month subscription to the Financial Times and FT.com. The Financial Times is the world's most respected financial newspaper providing a broad assessment on finance, business and the industrial sector. Subscriptions will start within 6-8 weeks of the application process, and are limited to one per client. For questions about your subscriptions call 800-628-8088 or email uscirculation@ft.com. US and Canada enrollees only.

Lunch included for all students taking day classes.