Product Description

A comprehensive guide to managing global financial risk

From the balance of payment exposure to foreign exchange and interest rate risk, to credit derivatives and other exotic options, futures, and swaps for mitigating and transferring risk, this book provides a simple yet comprehensive analysis of complex derivatives pricing and their application in risk management. The risk posed by foreign exchange transactions stems from the volatility of the exchange rate, the volatility of the interest rates, and factors unique to individual companies which are interrelated. To protect and hedge against adverse currency and interest rate changes, multinational corporations need to take concrete steps for mitigating these risks.

Managing Global Financial and Foreign Exchange Rate Risk offers a thorough treatment of price, foreign currency, and interest rate risk management practices of multinational corporations in a dynamic global economy. It lays out the pros and cons of various hedging instruments, as well as the economic cost benefit analysis of alternative hedging vehicles. Written in a detailed yet user–friendly manner, this resource provides treasurers and other financial managers with the tools they need to manage their various exposures to credit, price, and foreign exchange risk.

Managing Global Financial and Foreign Exchange Rate Risk covers various swaps in this geometrically growing field with notional principal in excess of $120 trillion. From caplet and corridors to call and put swaptions this book covers the micro structure of the swaps, options, futures, and foreign exchange markets. From credit default swap and transfer and convertibility options to asset swap switch and weather derivatives this book illustrates their simple pricing and application. To show real-world examples, each chapter includes a case study highlighting a specific problem, as well as a set of steps to solve it. Numerous charts accompanied with actual Wall Street figures provide the reader with the opportunity to comprehend and appreciate the role and function of derivatives, which are often misunderstood in the financial market.

This detailed resource will guide the individual, government and multinational corporations safely through the maze of various exposures. A must-read for treasures, controllers, money mangers, portfolio managers, security analyst and academics, Managing Global Financial and Foreign Exchange Rate Risk represents an important collection of up-to-date risk management solutions.

Ghassem A. Homaifar is a professor of financial economics at Middle Tennessee State University. He has Master of Science in Industrial Management from State University of New York at Stony Brook and PhD in Finance from University of Alabama in 1982. He is the author of numerous articles that have appeared in the Journal of Risk and Insurance, Journal of Business Finance and Accounting, Weltwirtschsftliches Archiv Review of World Economics, Advances in Futures and Options Research,Applied Financial Economics, Applied Economics, International Economics, and Global Finance Journal.

Product Details

• Amazon Sales Rank: #1213564 in Books
• Published on: 2003-12-08
• Original language: English
• Dimensions: 1.27" h x 6.40" w x 9.28" l, 1.56 pounds
• Binding: Hardcover
• 400 pages

Book Info
Explains of what students often find is the most difficult subject matter in finance. Examples provide a way to gain experience in working realistic problems.

From the Inside Flap
A comprehensive guide to managing global financial risk

From the balance of payment exposure to foreign exchange and interest rate risk, to credit derivatives and other exotic options, futures, and swaps for mitigating and transferring risk, this book provides a simple yet comprehensive analysis of complex derivatives pricing and their application in risk management. The risk posed by foreign exchange transactions stems from the volatility of the exchange rate, the volatility of the interest rates, and factors unique to individual companies which are interrelated. To protect and hedge against adverse currency and interest rate changes, multinational corporations need to take concrete steps for mitigating these risks.

Managing Global Financial and Foreign Exchange Rate Risk offers a thorough treatment of price, foreign currency, and interest rate risk management practices of multinational corporations in a dynamic global economy. It lays out the pros and cons of various hedging instruments, as well as the economic cost benefit analysis of alternative hedging vehicles. Written in a detailed yet user-friendly manner, this resource provides treasurers and other financial managers with the tools they need to manage their various exposures to credit, price, and foreign exchange risk.

Chapters include coverage of such topics as:

• Balance of payment exposure management
• Foreign exchange rate dynamics
• Application of options and futures for managing exposure
• Principles of futures: pricing and applications
• Interest rate futures: pricing and applications
• Swaps
• Transaction, translation, and economic exposure
• Debt, equity, and other synthetic structures
• Options on futures
• Credit derivatives: pricing and applications
• Credit and other exotic derivatives

Managing Global Financial and Foreign Exchange Rate Risk covers various swaps in this geometrically growing field with notional principal in excess of $120 trillion. From caplet and corridors to call and put swaptions, this book covers the microstructure of the swaps, options, futures, and foreign exchange markets. From credit default swap and transfer and convertibility options to asset swap switch and weather derivatives, this important reference illustrates their simple pricing and application. To show real-world examples, each chapter includes a case study highlighting a specific problem, as well as a set of steps to solve it. Numerous charts accompanied by actual Wall Street figures provide the reader with the opportunity to comprehend and appreciate the role and function of derivatives, which are often misunderstood in the financial market.

This detailed resource will guide the individual, as well as government and multinational corporations, safely through the maze of various exposures. A must-read for treasurers, controllers, money mangers, portfolio managers, security analysts, and academics, Managing Global Financial and Foreign Exchange Rate Risk represents an important collection of up-to-date risk management solutions.

From the Back Cover
Praise for Managing Global Financial and Foreign Exchange Rate Risk

"From caplets and corridors to perps and wild card options, Homaifar covers the details and the essentials of the foreign exchange and futures markets. This is a thorough, detailed, yet readable and clear treatment of foreign exchange and futures markets."
––George M. McCabe
Professor of Finance, University of Nebraska
Editor, Quarterly Journal of Business and Economics

"Professor Homaifar’s book does an excellent job of explaining in practical terms the application of options and futures in managing risk. The examples in the book provide an excellent way for students and professionals to gain experience in working realistic problems."
––Dr. Billy Helms
Professor and Department Chair
College of Commerce and Business Administration, The University of Alabama

"Professor Homaifar has the knack of reducing esoteric and arcane concepts into terms that anyone who teaches courses in risk management or is a practitioner in risk management can understand and apply. I highly recommend this book."
––Dr. Ken Hollman
Professor and Holder of the Tommy Martin Chair of Insurance
Middle Tennessee State University

"Managing Global Financial and Foreign Exchange Risk provides clear and lucid explanations of what students often find is the most difficult subject matter in finance. In addition, the book is well written and thorough. Highly recommended."
––Harold A. Black
James F. Smith Jr. Professor in the Department of Finance
University of Tennessee