elsevier.com/locate/jfstabil Hedge funds and financial stability: Regulating prime brokers will mitigate systemic risks Michael R. King a‚∗‚ Philipp Maier b‚1 a b Monetary and Economic Department‚ Bank for International Settlements‚ Centralbahnplatz 2‚ CH-4002 Basel‚ Switzerland International Studies Division‚ Bank of Canada‚ 234 Wellington‚ Ottawa‚ Ontario‚ Canada K1A 0G9 a r t i c l e i n f o a b s t r a c t We review key characteristics of the hedge fund industry‚ and identify conditions
Premium Hedge fund
agrees to the new Novo sale‚ determine the present value of the expected future cash inflow assuming: (1) there is no hedge‚ (2) the company hedges using a forward contract‚ and (3) the company hedges using the money market. Finding a present value is necessary for the following reason: With no hedge or a with forwardcontract hedge‚ the cash flow will occur at the
Premium Marketing Management Economics
E- Business at HEDGE EQUITIES PVT LTD Introduction to HEDGE EQUITIES PVT LTD Team Hedge is a balanced mix of more than 15 years experience cutting across various industries with a strong background in the financial markets. The board comprises of six power houses in their respective fields - Fedex Securities‚ Baby Marine Exports‚ Thakker Developers‚ Smart financial‚ SM Hegde (CFO‚ Videocon Industries) and Padmashree Mohan Lal Fedex Securities Managed
Premium Bank Stock market Bond
that the income effects of the hedge instrument and the income effects of the item being hedged should be recognized at the same time. Question A–3 If interest rates change‚ the change in the debt’s fair value will be less than the change in the swap’s fair value. The gain or loss on the $500‚000 notional difference will not be offset by a corresponding loss or gain on debt. Any increase or decrease in income resulting from a hedging arrangement would be a result of hedge ineffectiveness such as this
Premium Futures contract Bond Income statement
RISK MANAGEMENT PRACTICES IN THE AIRLINE INDUSTRY by Sharon Fernando PROJECT SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR THE DEGREE OF MASTER OF ARTS In the Faculty of Business Administration Financial Risk Management O Sharon Fernando 2006 SIMON FRASER UNIVERSITY Summer 2006 All rights reserved. This work may not be reproduced in whole or in part‚ by photocopy or other means‚ without permission of the author. APPROVAL Name: Sharon Fernando Degree: Master of Arts Title of Project:
Premium Airline Risk management Risk
Group Member: Từ Vũ Quỳnh Hương Đàm Thị Bích Phương Trần Thị Mai Liên Nguyễn Lệ Hằng Phan Ngọc Anh Financial Risk Management Assignment Outline Foreword - How the group has come up with the topic and general view of the assignment - Set expectation on what our group can expect to gain after doing the
Premium Foreign exchange market Risk Forward contract
forward hedge and a money-market hedge. The learning objectives of the case are as follows: • To explore the magnitude and effect of exchange-rate risks. • To illustrate exchange-rate risk management through two conventional hedges—a forward-contract hedge and a money-market hedge. • To demonstrate market parity and identify how preferences arise from unique company characteristics. • To explore issues related to pricing of international bids. Hedging Before exploring the two hedges‚ it
Premium Forward contract Net present value Currency
DERIVATIVES FOR MANAGING FINANCIAL RISK Q-1 What are derivatives? Why do companies hedge risk using derivatives? A-1 A derivative is a financial instrument whose pay-offs is derived from some other asset which is called an underlying asset. Option‚ an example of a derivative security‚ is a more complicated derivative. There are a large number of simple derivatives like futures or forward contracts or swaps. Derivatives are tools to reduce a firm’s risk exposure. A firm can do away with unnecessary
Premium Futures contract Derivative Hedge
financial position and measure those instruments at fair value. If certain conditions are met‚ a derivative may be specifically designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment‚ (b) a hedge of the exposure to variable cash flows of a forecasted transaction‚ or (c) a hedge of the foreign currency exposure of a net investment in a foreign operation‚ an unrecognized firm commitment‚ an available-for-sale security‚
Premium Financial Accounting Standards Board Hedge Risk
maturity‚ which is true? a. Call‚ payoff 10‚000P b. Put‚ loss 10‚000R c. Call‚ profit 30‚000R d. Call‚ loss 30‚000R e. None of the above 4. Suppose that you will be receiving $1‚000‚000 on Feb 2 (about two months). Which option should you use to hedge its value in Brazilian Real‚ and what will your effective exchange rate be if on Feb 2‚ the spot 2.35 R/$. Forward is 2.2R/$. a. Call‚ 1.95 b. Put‚ 2.55 c. Call‚ 2.60 d. Put‚ 2.35 e. Put‚ 2.15 5. Assuming a forward rate of 2.2‚ at what realized
Premium Forward contract Futures contract Derivative