Deloitte & Touche/Columbia University
COMPETITIVE READINESS PROGRAM
Managing Corporate Financial Risk
Prof. Ian Giddy
New York University

Managing market risk is an increasingly important aspect of corporate financial management. This module provides insights into three difficult aspects of risk management: interest rate risk, commodity price risk and foreign currency exposure. The instructor employs modern principles of finance to address the practical problems of measuring and managing corporate fianial risk in the context of business uncertainties, accounting imperfections and incomplete markets. 

AM             Interest Rate and Commodity Risk

Corporate Financial Risk: Transactions, Accounting and Economic Exposure
Integration of Financing and Hedging Decisions
Hedging Instruments Compared
Case Study: "Liberty Travel"
Commodity Prices and the Cost of Carry Theory
Commodity Swaps and Commodity-Linked Bonds
Illustration: "Qantas"
Lunch

PM             Managing Currency Risk

Foreign Exchange and Eurocurrency Instruments
Should Companies Actively Manage Currency Risk?
Anatomy of Recent Accidents
Transactions, Accounting and Economic Exposure
Tools and Techniques for Managing Currency Exposure
Case study: "U.S. Semiconductor"
Guidelines for the Use of Different Hedging Instruments
Managing Financial Risk and the "Value at Risk" Approach
Conclusion and Recap
  

Readings:
"A Framework for Risk Management"
"The Management of Foreign Exchange Risk"

Cases:
"Liberty Travel," "Qantas," and "U.S. Semiconductor"

Handout:
"Managing Corporate Financial Risk"

References:
Smith, Smithson & Wilford, Managing Financial Risk, Institutional Investor, 1989
Shapiro, Multinational Financial Management, Prentice-Hall, 1996
Giddy, Global Financial Markets, DC Heath, 1994.
 


Ian H. Giddy, Professor of Finance
New York University Stern School of Business
44 West 4th Street, New York 10012
Tel 212 998-0332 Fax 212 995-4233 

Go to Giddy's Web Portal Contact Ian Giddy at ian.giddy@nyu.edu