ch18derivativesandriskmanagement(财务管理,英文版).pptVIP

CHAPTER 18Derivatives and Risk Management Derivative securities Fundamentals of risk management Using derivatives to reduce interest rate risk If volatility is due to systematic risk, it can be eliminated by diversifying investors’ portfolios. Increase their use of debt. Maintain their optimal capital budget. Avoid financial distress costs. Utilize their comparative advantages in hedging, compared to investors. Reduce the risks and costs of borrowing. Reduce the higher taxes that result from fluctuating earnings. Initiate compensation programs to reward managers for achieving stable earning