1 Exam (elaborations) Financial Risk Management MidTerm 2 Exam (elaborations) Financial Risk Management Final Exam 3 Exam (elaborations) Financial Risk Management 4 Exam (elaborations) Financial Risk Management Final 5 Exam (elaborations) Financial Ri

VAR with the confidence level of 1% means - answer-•the worst possible loss such that there is less than 1% chance of losing more than that in a single trading day. This worst possible loss determines - answer-the minimum capital requirement for financial institutions, scaled by an (arbitrary) ...

The risk that purchasing power will be lost while the loan is at the borrower's disposal - answer-Inflation risk The probability of loss from actions of governments, such as changes in tax laws or environmental regulations or expropriation of assets - answer-Political risk The risk of loss ...

Futures prices are discovered by: - answer-when contracts are bought and sold The premise that makes hedging possible is cash and futures prices: - answer-generally change in the same direction by similar amounts Open interest refers to: - answer-total number of futures that have not been offs...

Risks of Investing - answer-Recession, Floating Interest Rate, Inflation/Deflation, Fx exposure (exchange rate), maturity risk, liquidity risk, new product, taxes Money Market vs. Capital Market Securities - answer-Money Market: <1 year, T-bills, currencies, short term bonds Capital Market: &...