Practical analysis for investment professionals

risk management


Rethinking Corporate FX Hedging: Seeing the Forest through the Trees

Why are publicly traded companies so often blindsided by FX volatility?

Project Finance: Beware Interest Rate Miscalculations

To navigate the storms of interest rate variability, we need foresight and flexibility.

The Fitch Downgrade: The Principal–Agent Problem in Modern Finance

Fitch Ratings' US credit downgrade highlights a latent principal–agent problem in modern financial markets: Investors have outsourced much of their risk management to the rating agencies.

When Hindsight Becomes Foresight: Replicating Investment Performance

Most investment products simply provide exposure to the stock market in complicated wrappers.

The Predictive Power of the Yield Curve

The predictive power of the yield curve is a widely accepted causal narrative. But the history shows that the causal correlation between long and short rates is actually quite weak.

A Sea Change: Howard Marks, CFA, on the End of Easy Money

“I'm not saying that interest rates are going to go back up. I just think they're done coming down,” Howard Marks, CFA, told Marg Franklin, CFA. "And if that's true, I think we're in a different environment."

Regret and Optimal Portfolio Allocations

To understand risk for portfolio optimization purposes, we need to consider regret.

Presidential Election Cycle Theory: A Bullish 2023?

What are the strengths, limitations, and nuances of presidential election cycle theory and what does the current political context foretell regarding whether 2023 will follow the predicted trend?

Splitting the Risk: How to Manage Interest Rate Risk in Project Finance

How can the two primary stakeholders in project finance best allocate interest rate risk?



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