Ideas from books, articles & podcasts.
Corporations managing risk themselves face a fundamental question: why do they need to do it? Individuals and investment groups can manage the risk on their own. Making good investments seems like a better option.
Hedging bets are mostly fictional transactions that don’t affect the value of any operating asset of the company, making it a loss-making proposition if the transaction costs and other overheads are added up.
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Many companies use the insights of financial managers and external consultants to manage their risk. A one-size-fits-all solution is not yet in existence when it comes to risk management.
Top leaders and managers can benefit from these broad guidelines on risk-management issues:
Top-level managers and financial engineers must work in tandem to develop and execute a strong risk-management strategy. The three basic premises for this corporate strategy are:
Risk management through hedging allows companies to borrow from themselves, transferring funds to where they are needed the most.
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