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CHAPTER 23 INTRODUCTION TO FINANCIAL RISK MANAGEMENT 786
■ WHAT COMPANIES DO: Google’s Earnings Boosted by Hedging Program 786
23-1 Overview of Financial Risk Management 788
23-1a Risk Factors 788
23-1b The Hedging Decision 790
23-2 Forward Contracts 794
23-2a Forward Prices 794
23-2b Currency Forward Contracts 796
23-2c Interest Rate Forward Contracts 799
23-3 Futures Contracts 800
23-3a Hedging with Futures Contracts 804
23-3b Concerns when Using Futures Contracts 804
23-4 Options and Swaps 806
23-4a Options 806
23-4b Swaps 807
23-5 Financial Engineering 811
Summary 812 | Important equations 813 | Key terms 813 | Self-test problems 814 |
Questions 814 | Problems 815
■ MINI CASE Risk Management 817
■ Online Study Tools 817
Smart Video
David Childress, Asset Liability Manager,
Ford Motor Co. | p.789
Keith Woodward, Vice President of Finance,
General Mills | p.790
John Graham, Duke University | p.791
Betty Simkins, Oklahoma State
University | p.809
SMART concepts | p.796
SMART solutions | p.815
Glossary G-1
Names and company index I-1
Subject index I-4
Contents