Emne Currency risk

Simulation of balance sheet risk

Arkivert som Hedging av i 2013 0 kommentarer
Simulation of balance sheet risk

As I wrote in my article about balance sheet risk, a company with covenants in its loan agreements may have to hedge balance sheet risk even though it is not optimal from a market risk perspective. But how can the company know which covenant to hedge? Often a company will have more than one covenant, […]

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Hedging the balance sheet

Arkivert som Risk av i 2013 0 kommentarer
Hedging the balance sheet

A hedging strategy should be oriented towards hedging the company’s market value to build shareholder value. Normally hedging of balance sheet items is not a good argument for hedging from the shareholders point of view, since a company’s balance sheet not necessarily reflect its market value. In some cases, however, it may be argued that […]

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