Search results
Results from the WOW.Com Content Network
This standard was created in response to significant hedging losses involving derivatives years ago and the attempt to control and manage corporate hedging as risk management not earnings management. All derivatives within the scope of FAS133 must be recorded at fair value as an asset or liability. Hedge accounting may be applied if there is ...
Derivatives can be used either for risk management (i.e. to "hedge" by providing offsetting compensation in case of an undesired event, a kind of "insurance") or for speculation (i.e. making a financial "bet"). This distinction is important because the former is a prudent aspect of operations and financial management for many firms across many ...
For derivative portfolios, and positions, the Greeks are a vital risk management tool: as above, these measure sensitivity to a small change in a given underlying price, rate, or parameter, and the portfolio is then rebalanced accordingly [98] by including additional derivatives with offsetting characteristics, or by purchasing or selling ...
Do you ever wonder how a company like MF Global, which most of us had never heard of before recently, could send the market into a panic over potential banking losses? Our financial system has ...
XVA Desks - A New Era for Risk Management. Palgrave Macmillan UK. ISBN 978-1-137-44819-4. Antoine Savine and Jesper Andreasen (2021). Modern Computational Finance: Scripting for Derivatives and XVA. Wiley. ISBN 978-1119540786. Donald J. Smith (2017). Valuation in a World of CVA, DVA, and FVA: A Tutorial on Debt Securities and Interest Rate ...
Although rho (the partial derivative with respect to the risk-free interest rate) is a primary input into the Black–Scholes model, the overall impact on the value of a short-term option corresponding to changes in the risk-free interest rate is generally insignificant and therefore higher-order derivatives involving the risk-free interest ...
One of the biggest risks to the world's financial health is the $1.2 quadrillion derivatives market. It's complex, it's unregulated, and it ought to be of concern to world leaders that its ...
A funded credit derivative involves the protection seller (the party that assumes the credit risk) making an initial payment that is used to settle any potential credit events. (The protection buyer, however, still may be exposed to the credit risk of the protection seller itself. This is known as counterparty risk.)