Financial Strategy and Risk Management

In the global financial world, companies devote considerable resources in managing various risks facing the organisation. The risk that any firm faces in its operations is often defined in terms of its exposures that include the elements of interest rate risk, currency risk, business cycle risk, inflation risk, commodity price risk and industry risk. Risk management encompasses the assessment and management of the corporate’s exposure to the different sources of risk through the use of derivatives and other allied activities. The very idea of managing exposure to the various sources of risk is relatively new but is continuously growing in importance. The trend towards a greater focus towards risk management is primarily due to a variety of factors, such as the increased volatility of the interest rates and the exchange rates. Added to this, the increased understanding of the derivative instruments has also added to the increased level of their acceptance as tools of risk management. Changing corporate profiles coupled with the ways of doing business has led to a different approach towards dealing with and managing risk. Today, organizations are gradually shifting from the traditional piecemeal approach of risk management towards a more holistic and organization wide approach, commonly termed enterprise risk management. This book "Financial Strategy and Risk Management" provides a unique blend of risk management and corporate strategy and offers an interesting reading.