engleski

Corporate Risk Management – Measuring and Managing Market Risk

In this article, we outlined the major factors that have motivated companies to better understand their market risks. By improving the way risk is measured, companies can also improve the way risk is managed, especially by communicating an “official” understanding the risk throughout the organisation and implementing strategies that are consistent with their risk preferences and tolerance for earnings volatility. In the corporate environment, uncertainty in future earnings and cash flow is caused not only by uncertainty in company's underlying business (e.g. sales volumes), but also by a number of other risks, including market risk. Market risk can arise from a number of factors, including foreign exchange exposures, interest rate exposures, commodity price- sensitive revenues, or expenses, pension liabilities, and stock option plans. In this article, we provided an overview of the new framework for managing market risk and the key steps in implementing this method to calculate corporate risk measures such as Earnings-per- share-at Risk (EPSaR).

Corporate Risk Management; Market Risk; Risk Measurement; Corporate Metrics; Earnings-at-Risk; Earnings-per-Share-at-Risk; Cash-Flow-at-Risk.

izvorni znanstveni rad