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Advanced Risk Management: Risk Calculation Methods

Understand how a robust risk management construct should be created and how to employ advanced techniques in a successful manner.

Many practitioners lack a comprehensive framework, adequate tools, and an appropriate suite of limits and metrics to proactively manage the financial risks related to their business. Having experienced four tail events in the last 20 years, the phrase 'no one saw this coming' is no longer good enough. This paradigm is especially meaningful for companies that are exposed to material financial risk, both on the asset and liability side of their operations, such as financial institutions, trading companies, and other corporations buying and selling physical goods. It is time for these enterprises to elevate their risk management protocols. This course will help risk managers understand how a robust risk management construct should be created and how to employ advanced techniques in a successful manner.

65 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Risk Management Framework

  • Risk Governance and Structure
  • Defining Risk in Relation to Strategy
  • Identifying and Quantifying Risk Exposure
    • Volumes/Quantities of Purchases, Inventory, and Sales
    • Inventory Cost, Purchase, and Sales Prices

Stress Testing and Scenario Analysis

  • Prices Go up or Down 10%, 25%, 75%, or Even 200%?
  • Assessing Value at Risk, Cash Flow at Risk, and/or Earnings at Risk

Determine Risk Management Objective and Define Hedge Matrix

  • Establish Ceiling and Floor Hedge Ratio
  • Create Risk Limits and Place Guardrails Around the Program

Develop a Specific Risk Outlook

  • Critical Analysis of Historical Price Performance Relative to the Current Environment
  • Perform Price Simulations (e.g., Monte Carlo) to Consider Where Prices Could Go
  • Use These Inputs to Define the Right Mix of Hedging Instruments and Hedge Ratios to Dynamically Mitigate Risk

Questions and Answers

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

This course was last revised on July 28, 2022.

Call 1-866-352-9540 for further credit information.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

MP3 Download

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Craig Haymaker, CPA

Craig Haymaker, CPA

HedgeStar

  • Managing Director of HedgeStar, where he oversees the risk management consulting, hedge accounting, and valuation groups
  • Subject matter expert in financial reporting and accounting for debt, equities, derivatives, and other financial instruments
  • Has over 11 years of audit, professional accounting, and risk management experience
  • Has held positions with top companies, including Deloitte & Touche LLP (Boston), Liberty Mutual Group (Boston), and U.S. Bank (Minneapolis), with a focus on treasury departments, capital markets, and risk functions
  • Events Committee Chair and Steering Committee member for the Professional Risk Managers’ International Association (PRMIA) in Minneapolis
  • B.B.A. degree in accounting, Stonehill College; CPA accreditation
  • Can be contacted at [email protected] or 952-208-5704
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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  • State Specific Credit Tracker
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Product ID: 410074
Published 2022
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