Mastering Interest Rate Risk Strategy

Interest rate changes will affect most firms because they will have interest bearing assets or liabilities. As a result, interest rate movements have an unfavourable impact and managing interest rate risk can be highly beneficial for the firm. But high-profile derivative blunders show that this is no easy task.

In Mastering Interest Rate Risk Strategy, Victor Macrae shows you how to avoid the mis-selling of derivatives and derivatives blunders and how to set up an optimal interest rate risk strategy.

Mastering Interest Rate Risk Strategy includes:

   Past derivatives blunders and how you can learn from them

   A proven analytical method for strategy formulation

   Hedging theory

   Bank financing for non-financial firms

   How movements in the financial markets may affect the firm

   Financial statement impact of interest rate risk

   The working and risks of using swaps, FRAs, caps, floors, collars and swaptions

This is a wonderful and easy to read tour of interest rate risk and its management, and mismanagement. Anyone who wants to better understand why and how non-financial firms should be dealing with interest rate risk should read this book.

Gordon M. Bodnar, Professor on International Finance, Johns Hopkins University

Macraes guide is an excellent cookbook for financial managers. With many cases and examples, this book offers guidance in robust risk management techniques.

Abe de Jong, Professor of Corporate Finance and Corporate Governance at Rotterdam School of Management, Erasmus University