{"product_id":"managing-interest-rate-risk-isbn-9780471485490","title":"Managing Interest Rate Risk","description":"As with previous titles in the IIA (Institute of Internal Auditors) series this is a clear and practical guide to a subject of key importance to financial managers. Whether borrowing, investing, saving or trading, a company will always have to take into account the cost of capital and therefore interest rate risk. The highly accessible style explains everything from the basic principles through to the techniques allowing those without prior knowledge to understand the nature and use of a variety of financial tools, including derivative instruments. This is the third part of the trilogy on market risk, the previous two being Managing Currency Risk and Managing Commodity Risk.  PREFACE \u003cbr\u003e  \u003cbr\u003e  Modern Risk Management and the Non-Financial Sector \u003cbr\u003e  \u003cbr\u003e  The Scope and Purpose of the Book \u003cbr\u003e  \u003cbr\u003e  The Methodology \u003cbr\u003e \u003cbr\u003e  Risk Management and Risk Quantification \u003cbr\u003e \u003cbr\u003e  The Role of Pricing Derivatives \u003cbr\u003e  \u003cbr\u003e  Structure of the Book \u003cbr\u003e \u003cbr\u003e  CHAPTER 1 INTEREST RATE RISK, INTEREST RATE DERIVATIVES AND THE MANAGEMENT FUNCTION \u003cbr\u003e  \u003cbr\u003e  Introduction \u003cbr\u003e \u003cbr\u003e  Fundamentals of Interest Rate Risk \u003cbr\u003e  \u003cbr\u003e  Financial Derivatives \u003cbr\u003e  \u003cbr\u003e  Interest Rate Derivatives \u003cbr\u003e  \u003cbr\u003e  The Interest rate Risk Management Function \u003cbr\u003e  \u003cbr\u003e  CHAPTER 2 INTEREST RATE RISK MANAGEMENT IN THE NON-FINANCIAL SECTOR \u003cbr\u003e  \u003cbr\u003e  Introduction \u003cbr\u003e \u003cbr\u003e  The Critique of Corporate Risk Management \u003cbr\u003e  \u003cbr\u003e  In Defence of Corporate Risk Management \u003cbr\u003e \u003cbr\u003e  Conclusion on Corporate Risk Management \u003cbr\u003e \u003cbr\u003e  Maintaining a Sound System of Control \u003cbr\u003e \u003cbr\u003e  Diversification \u003cbr\u003e \u003cbr\u003e  Hedging With Financial Derivatives \u003cbr\u003e  \u003cbr\u003e  CHAPTER 3 INTEREST SPOT AND FRA MARKETS \u003cbr\u003e \u003cbr\u003e  The Spot Interest Rate Market \u003cbr\u003e  \u003cbr\u003e  Forward Rate Agreements \u003cbr\u003e \u003cbr\u003e  Case Study 1 Using a FRA to Lock in Future Borrowing Rates \u003cbr\u003e  \u003cbr\u003e  CHAPTER 4 INTEREST RATE FUTURES CONTRACTS \u003cbr\u003e  \u003cbr\u003e  Introduction to Interest Rate Futures \u003cbr\u003e \u003cbr\u003e  An Exchange Traded Forward Rate Agreement \u003cbr\u003e  \u003cbr\u003e  A Standardised Contract - the Minimum Conditions \u003cbr\u003e  \u003cbr\u003e  Major Interest Rate Futures Contracts \u003cbr\u003e  \u003cbr\u003e  Futures Market Terminology \u003cbr\u003e \u003cbr\u003e  The Role of Basis in Interest rate futures \u003cbr\u003e \u003cbr\u003e  The Futures Hedge Ratio \u003cbr\u003e  \u003cbr\u003e  Case Study 2 Hedging a Borrowing Rate with Eurodollar Futures \u003cbr\u003e  \u003cbr\u003e  Case Study 3 Hedging an Investment Rate with Eurodollar Futures \u003cbr\u003e \u003cbr\u003e  Discussion of the Case Studies \u003cbr\u003e \u003cbr\u003e  CHAPTER 5 INTEREST RATE SWAPS \u003cbr\u003e \u003cbr\u003e  Introduction to Interest Rate Swaps \u003cbr\u003e \u003cbr\u003e  Principles of Interest Rate Swaps \u003cbr\u003e \u003cbr\u003e  Uses of interest rate swaps \u003cbr\u003e \u003cbr\u003e  Structuring Interest Rate Swaps \u003cbr\u003e \u003cbr\u003e  The Swap Rate \u003cbr\u003e  \u003cbr\u003e  Practical Interest Rate Swaps \u003cbr\u003e \u003cbr\u003e  Case Study 4 Hedging a term loan with an interest rate swap. \u003cbr\u003e  \u003cbr\u003e  Asset Swaps \u003cbr\u003e \u003cbr\u003e  Interest Rate Basis Swaps \u003cbr\u003e \u003cbr\u003e  Case Study 5 Managing Interest Rate Risk with a Basis Swap \u003cbr\u003e  \u003cbr\u003e  CHAPTER 6 INTEREST RATE OPTIONS \u003cbr\u003e \u003cbr\u003e  Introduction \u003cbr\u003e \u003cbr\u003e  The Fundamental Principles of Options \u003cbr\u003e \u003cbr\u003e  Option Pricing \u003cbr\u003e \u003cbr\u003e  The Intrinsic Value of an Option \u003cbr\u003e  \u003cbr\u003e  The Time value of an Option \u003cbr\u003e \u003cbr\u003e  The Greeks \u003cbr\u003e \u003cbr\u003e  Exercising Options \u003cbr\u003e \u003cbr\u003e  The Risk of the Parties to an Option \u003cbr\u003e  \u003cbr\u003e  OTC Interest Rate Guarantees \u003cbr\u003e  \u003cbr\u003e  Case Study 6 Locking in a borrowing rate with an IRG \u003cbr\u003e \u003cbr\u003e  OTC Option Variants \u003cbr\u003e \u003cbr\u003e  Options on Interest rate futures \u003cbr\u003e  \u003cbr\u003e  Option Standardisation \u003cbr\u003e \u003cbr\u003e  Option Classification \u003cbr\u003e \u003cbr\u003e  Selling Options on Futures \u003cbr\u003e \u003cbr\u003e  Case Study 7 Hedging an interest bearing investment using options on futures \u003cbr\u003e \u003cbr\u003e  CHAPTER 7 STRATEGIES WITH INTEREST RATE SWAPS, SWAPS BASED DERIVATIVES AND SWAPS MIMICS \u003cbr\u003e \u003cbr\u003e  Introduction \u003cbr\u003e \u003cbr\u003e  Strategies with Standard Interest Rate Swaps \u003cbr\u003e  \u003cbr\u003e  Case Study 8 A Debt Market Arbitrage \u003cbr\u003e  \u003cbr\u003e  Case Study 9 Arranging an Off-Market Swap \u003cbr\u003e  \u003cbr\u003e  Swaps Strategies with special terms \u003cbr\u003e  \u003cbr\u003e  Case Study 10 Structuring a Callable Fixed Rate Swap \u003cbr\u003e  \u003cbr\u003e  Case Study 11 Hedging a borrowing rate with an adjustable fixed rate swap \u003cbr\u003e \u003cbr\u003e  Swaps as the Underlying Asset of Other Derivatives \u003cbr\u003e \u003cbr\u003e  Futures on Swaps \u003cbr\u003e  \u003cbr\u003e  Options on Swaps \u003cbr\u003e  \u003cbr\u003e  Case Study 12 Hedging the swap rate on future borrowings using a swaption \u003cbr\u003e \u003cbr\u003e  Strategies Mimicking Swaps \u003cbr\u003e \u003cbr\u003e  Case Study 13 Hedging a borrowing rate with a futures strip \u003cbr\u003e  \u003cbr\u003e  CHAPTER 8 STRATEGIES WITH INTEREST RATE OPTIONS AND EXOTIC INTEREST RATE OPTIONS \u003cbr\u003e  \u003cbr\u003e  Introduction \u003cbr\u003e \u003cbr\u003e  Cost Reduction Strategies \u003cbr\u003e \u003cbr\u003e  Case Study 14 Locking in a borrowing rate with OTM options on futures \u003cbr\u003e \u003cbr\u003e  Case Study 15 Hedging borrowing rates with an interest rate collar \u003cbr\u003e \u003cbr\u003e  Zero Cost Strategies \u003cbr\u003e \u003cbr\u003e  Case Study 16 Hedging future borrowing rates using a borrower's interest rate lock \u003cbr\u003e  \u003cbr\u003e  Case Study 17 Hedging a borrowing rate with a Participating Interest Rate Cap \u003cbr\u003e  \u003cbr\u003e  Exotic Options JOHN J. STEPHENS has many years' international business and banking experience. Trained as a lawyer, he subsequently specialised in business related issues and for 10 years was CEO of a management consultancy firm with many large international clients. From 1992 onwards, he worked in the financial services sector for SANLAM and later ABSA Bank, before specialising in futures and options. He now runs a training company specialising in the futures and derivatives markets and is also a non-practicing advocate of the Supreme Court of South Africa.  The effects of interest rate changes on a business can be drastic. Should interest rates change over time, a company can find itself with a burden of debt it is unable to service, or an income that is far less than expected. This can have a very damaging effect on a company's financial performance if it is not anticipated. \u003cbr\u003e  \u003cbr\u003e  In this book, John Stephens demonstrates how to manage this risk with the use of financial derivatives. An in-depth knowledge of mathematics, interest rates, or derivatives is not required in order to understand or practice the techniques in this book. The author explains in full the nature and uses of all techniques to manage interest rate risk.  \u003cp\u003eThis book examines, in a balanced and objective fashion, the extent to which financial derivatives can be used to reduce the exposure of a business to risk. Beginning with a general overview of the definitions, processes and procedures, the book then separately explains in detail each of the individual approaches. Topics dealt with include:\u003c\/p\u003e \u003cul\u003e \u003cli\u003eInterest spot and FRA markets\u003c\/li\u003e \u003cli\u003eInterest rate futures contracts\u003c\/li\u003e \u003cli\u003eInterest rate swaps\u003c\/li\u003e \u003cli\u003eInterest rate options  \u003cp\u003e\u003cbr\u003e \u003c\/p\u003e \u003c\/li\u003e \u003c\/ul\u003e  Economic conditions can change dramatically over time, requiring significant changes in interest rates. Loans that appeared desirable methods of expansion when taken out can, with a change in interest rates, become massive outgoings that leave the unprepared business exposed to potentially crippling debt.  \u003cp\u003eWhether borrowing, investing, saving or trading, a company will always have to take into account the cost of capital and therefore interest rate risk. The efficient management of this risk is essential for the survival of a company and any business that is exposed to such a risk should ensure that it is fully prepared to manage it.\u003c\/p\u003e \u003cp\u003eAimed at senior managers within businesses, this book is a practical primer on how to reduce risk from changes in interest rates.\u003c\/p\u003e","brand":"Wiley","offers":[{"title":"Default Title","offer_id":47989565685989,"sku":"NP9780471485490","price":135.0,"currency_code":"USD","in_stock":false}],"thumbnail_url":"\/\/cdn.shopify.com\/s\/files\/1\/1842\/7735\/files\/9780471485490.jpg?v=1761784621","url":"https:\/\/k12savings.com\/products\/managing-interest-rate-risk-isbn-9780471485490","provider":"K12savings","version":"1.0","type":"link"}