Financial Risk Management: Management of Interest Risk from a Corporate Treasury Perspective in a Service Enterprise

Financial Risk Management

Table of Contents

List of Figures

List of Abbreviations

1. Introduction

2. Essentials of Financial Risk Management in a Service Enterprise

2.1. Why Manage Financial Risk?

2.2. Classification of Interest Rate Risk in the Framework of Risk Management

2.3. The Financial Risk Management Cycle

2.4. Insight into the Service Sector and its Current Trends with respect to Financial Risk Management

3. Treasury as a Central Institution of Financial Risk Management

3.1. Corporate Treasury Risk Management and its Influencing Factors

3.2. Financial Risk Management within the Scope of the Treasury Risk Policy

4. Quantifying Interest Rate Risk

4.1. Understanding Interest Rate Risk

4.2. Duration and Convexity

4.3. Value at Risk

4.3.1. The Concept of Value at Risk

4.3.2. Historical Simulation

4.3.3. Variance-Covariance-Approach

4.3.4. Value at Risk of Derivatives

4.4. Cash Flow Mapping

4.4.1. Determining the Cash Flow Structure

4.4.2. Sensitivity Mapping

4.4.3. Variance Mapping

4.5. Implications for a Service Enterprise

5. Interest Risk Management Techniques

5.1. Hedging

5.1.1. Introduction to Hedging

5.1.2. Symmetric Hedging Instruments

5.1.3. Asymmetric Hedging Instruments

5.2. Implications for the Portfolio Alignment of a Service Enterpr

5.2.1. Duration

5.2.2. Benchmark

5.2.3. VaR Limit

6. Conclusion

7. Appendices

8. Bibliography