PPT-Risk-free interest rate workshop

Brian Kipps Swaps vs Bonds Theoretical considerations In evaluating an ideal risk free yield curve one should consider the characteristics required from such a curve Observable Transparent quoted in the open market easily validated. The Effective Annual . Rate (EAR). Indicates the total amount of interest that will be earned at the end of one year. The EAR considers . the effect of compounding. Also referred to as the effective annual yield (EAY) or annual percentage yield (APY). (Chapter 6). The cost of money. The price, or cost, of debt capital is the interest rate.. The price, or cost, of equity capital is the required return. The required return investors expect is composed of compensation in the form of dividends and capital gains.. the Cause of Public Interest. Indian Actuarial Profession. 23. rd. India Fellowship Seminar. USE OF DERIVATIVES IN HEDGING INTEREST RATE RISKS AND ITS RELEVANCE IN INDIAN INSURANCE INDUSTRY. Guide Name. Cash . Balance Plans in 2015 (Advanced. ). Presented by. Lawrence . Deutsch. , FSPA, MAAA, EA, Owner, Penguin Consulting and Design, Ltd, Fallbrook, CA. Andrew . Ferguson. , FSA, . MAAA, EA, Partner. Utility For Importer & Exporter. NEHA ABHISHEK, BANGALORE. Batch: 22, (5. th. July to 30. th. August, 2014). Agenda. Derivatives. List of Derivatives under various . categories. Concept of Hedging. Pay in 36 equal monthly installments, interest free, until September 2013.. If you do not pay the full amount of an installment when due, the. u. npaid portion of that installment will thereafter accrue interest as . Interest Rate Hedges. 1 June, depositing in 5 months. So buy December. . = 19. On 1 June we buy 19 December contracts. On 1 November we will sell. Price 96.60. Basis risk 60 ticks. By 1 November basis risk will fall by 5/7, leaving 17. 1. Managing Interest Rate Risk. Interest Rate Risk. The potential loss from unexpected changes in interest rates which can significantly alter a bank’s profitability and market value of equity. 2. Managing Interest Rate Risk. Interest Rate. principle. interest payment. interest rate = payment/principle. (these days often daily, but expressed as a yearly equivalent). Future Value: The future value of 100 at r% for t years is the amnt of money you will have in t years if invested at r%: principle*(1 r)^t. Banks customers) Banks delaers Securities firms Insurance Companies Pensions, Asset managements Investment trusts, Hedge funds Corporates, others Interbank Transactions The numbers represent the pro BankscustomersBanksdelaersSecuritiesfirmsInsurance CompaniesPensions Asset managementsInvestment trustsHedge fundsCorporates othersInterbank TransactionsThe numbers represent the proportion of NonIBOR H. ead. of . D. epartment. Financial System Analysis. . Directorate. Financial stability report. 2019 May. Main messages. International. . macroeconomic environment. Decelerating. . growth, . wait-and-see monetary policy. Overview. Types of Financial Risk. Credit Risk Management. Strong credit control procedures. Insurance. Debt factoring without recourse. Political Risk Management. Entering into foreign joint ventures. changing global setting. Mr. . Dooneshsingh Audit, Chief Policy Unit & . Mr. . Fadil . Dookhy. , Chief Reserve Management Unit. 14 July 2014. Monetary Policy Committee. Turnaround in monetary policy .