Derivatives for Decision Makers
Strategic Management IssuesBook - 1996
"Derivatives for Decision Makers is a first in explainingderivatives to those who need to understand them. It explains whatderivatives are, how they can be used as risk management tools, andwhat managers and decision makers need to know about the subject.Not only is the technical substance superb, but the form isaccessible to all decision makers."--Afsaneh MashayekhiBeschloss, Director, The World Bank Group
"Derivatives for Decision Makers is an excellent resource forboth users and providers of derivative products, regardless of thereader''s level of sophistication. The recent highly publicizedderivatives problems are objectively reviewed by the authors whocontribute important and sensible recommendations to avoid similarsituations in the future."--Dipak K. Rastogi, Executive VicePresident and former Head of Global Derivatives, Citibank, N.A.
"Derivatives can play a critical role in achieving corporatefinancing and investment strategies. Whether you are a novice or aseasoned practitioner, Crawford and Sen present a superb roadmapwith well-chosen, real-world illustrations. Their vivid insightsmake this book a ''must-read'' for corporate and pension fundmanagers."--Sandra S. Wijnberg, Vice President & AssistantTreasurer, PepsiCo, Inc.
"Crawford and Sen have done a fine job of making derivativescomprehensible for managers who need to understand the basicfeatures and uses of these instruments. This coverage, togetherwith the book''s unique emphasis on senior management''s fiduciaryobligations to the firm''s shareholders, sets this book apart fromother attempts to make derivatives accessible to senior management.This book is an important read."--John F. Marshall, ExecutiveDirector, International Association of Financial Engineers andProfessor of Financial Engineering, Polytechnic University
Derivatives are the power tools that enable users to analyzecomponents of risk and return inherent in an investment or abusiness. The popularity of derivative use in the marketplace hassurged in recent years, spurring financial innovation and betterrisk management. Yet this popular instrument is double-edged:derivatives are as risky as they are beneficial. In light ofrecent, highly publicized disasters--the Orange Countybankruptcy and the Barings fiasco--it is imperative thatbusiness and finance professionals have a current and basicknowledge of this complicated and venturesome field.
If you are a shareholder, director, or other decision maker in acompany utilizing derivatives, it is important that you know how tomaximize the benefits of derivatives and minimize the damage thatthey can cause. Now, two leading financial experts provide thesolid principles you need to understand and properly use derivativeproducts and structured financing. Starting upwards from the groundfloor, this straightforward, no-nonsense resource is replete withtables, graphs, and common examples and common sense, offeringinvaluable information on:The three major types of derivatives-options, futures, andswaps Leverage--what it is, why it is so important, how it isused to increase returns, and how it multiplies risk Hedging a stock portfolio and hedging industry risk withsynthetic futures Business risks--core and secondary risks; which businessrisks to hedge with derivatives Investment strategies using derivatives Derivative risks--market, credit, legal, and systemic Fiduciary duties--the duties of loyalty and care,exceptions, the prudent investor rule, business judgment, rule anddisclosure requirements Delegating management functions--selecting, instructing,and monitoring experts
Whether you''re a manager, director, attorney, accountant,corporate executive, or corporate shareholder, this comprehensivebook will prove to be an invaluable guide on utilizing and handlingderivatives wisely, resourcefully, and successfully.