How Do Firms Manage Financial Risk? (FRM Part 1 2023 - Book 1 - Chapter 2)

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After completing this reading you should be able to:
- Compare different strategies a firm can use to manage its risk exposures and explain situations in which a firm would want to use each strategy.
- Explain the relationship between risk appetite and a firm's risk management decisions.
- Evaluate some advantages and disadvantages of hedging risk exposures, and explain challenges that can arise when implementing a hedging strategy.
- Apply appropriate methods to hedge operational and financial risks, including pricing, foreign currency, and interest rate risk.
- Assess the impact of risk management tools and instruments, including risk limits and derivatives.

[@sus_sus00]

Thank you for the lecture :) Very helpful!

[@valeriofulgheri3758]

I like a lot how you explain these concepts, thank you very much

[@analystprep]

Glad you like them! If you like our video lessons, it would be appreciated if you could leave us a review at www.trustpilot.com/review/analystprep.com

[@Sima-lx3wm]

Thank you so much

[@analystprep]

You're most welcome! If you like our video lessons, it would be appreciated if you could leave us a review at www.trustpilot.com/review/analystprep.com

[@matthewrice7590]

I'm two videos in on this series and I keep hearing references to what I assume is a corresponding textbook, but I don't see any titles or links in the video's description. Does anyone know the name(s) of the book(s) being referred to in this series?

[@analystprep]

Those would be the official GARP FRM Books that you get when registering for the FRM Part I exam.

[@matthewrice7590]

@@analystprep thank you! I’m an engineer working in the finance industry and found these videos after looking for informational deep dives on credit ratings and risk, so I wasn’t really aware of the corresponding exam other than what was mentioned in the video. I appreciate the response!

[@adelitadiouf5200]

😊Ô O Oo