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The Use of financial hedging tools in asset-liability management to manage interest rate risks faced by banks and its effect to profit (study case : PT. Bank Danamon Indonesia tbk)

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Interest rate risk is one of the risks that financial institutions must face in their daily operations. Being exposed to interest rate risk could be prove fatal as no one can control its movement and business participants can only act as a price taker. The movement of interest rate can affect the firm's profit in terms of its interest income and expense as a potential decrease in income can result from an unfavorable movement of interest. Due to its importance, the research will elaborate the effect of interest rate movements to the firm's income and expense. Asset Liability management in terms of sensitivity gap and duration gap analysis will be applied to analyze the firm's exposure to interest rate risk and derivatives contract, in this case, a future and option contract will be used to mitigate the exposure. rnrnrnrnThe research will be using PT Bank Danamon Indonesia Tbk 5 year financial statements. Throughout the research, a simulation analysis of interest rate movement (increase or decrease) willbe conducted and its effect to the firm's net interest income and net worth can bernseen.

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Availability

B00585

(wh)

Available

Detail Information

Series Title

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Call Number

585

Publisher

: Swiss German University., 2009

Collation

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Language

English

ISBN/ISSN

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Classification

NONE

Content Type

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Media Type

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Carrier Type

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Edition

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Subject(s)

IBA

Specific Detail Info

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Statement of Responsibility

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