Chapter 14
Managing Uncertainty
IN THIS CHAPTER
Looking at interest-rate risk and inflation
Mitigating market risk
Considering credit risk
Factoring in foreign exchange risk
Examining off-balance-sheet, operating, and liquidity risks
Choosing ethical clients
Business finance is filled with risk. Okay, so maybe it’s not the same kind of risk that you’d face as a soldier or police officer (although any witness to the trading floors of a major stock exchange may argue that Wall Street can quite resemble a war zone), but no one laughs when their job is at risk because someone messed up managing the risks associated with corporate finances. This chapter discusses some of the more common forms of risk encountered in corporate finance.
Understanding that Risk Is Unavoidable
You may think that when it comes to managing corporate finances, you should avoid risk at all cost (pun intended!). ...
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