Description: Increasing uncertainties and volatility in financial as well as real goods markets increasingly reveal that controlling systems based on deterministic and pseudo-exact values are insufficiently eligible to manage the business activities. This raises the question how management systems can be modified to generate the adequate management impulses in volatile periods. Risk management deals from identifying, evaluating and aggregating chances and risks, which again determine the potential fluctuation range of relevant performance indicators. Everyday corporate life shows that risk management is considered important; but the corresponding processes to identify, evaluate and report chances and risks are seldom part of established decision criteria. This “paradox” lets assume that risks are managed in various differing and unsystematic ways. The combination of traditional controlling methods and risk management is not primarily a methodological challenge. The behavior of the whole organization, practiced over a long-year period, has to be transferred into a new corporate culture of transparent dealing with chances and risks. This paper describes the necessary change management process, which has to come along with necessary methodological modifications.

Description: This article will examine four approaches under two different methods (eight in total) used to combat the non-additivity of key rates and will compare them under a number of rate environments.

Description: To address non-parallel movement in the interest rates the concept of key-rate duration was introduced in mid-'80s by Tom Ho. I will define certain key rate metrics, their variation used in the industry, how to calculate them, and an existing industry issue with how they are used. Additionally, I propose a novel technique to calculate key rates to mitigate the problem faced in the industry

Description: To address non-parallel movement in the interest rates the concept of key-rate duration was introduced in mid-'80s by Tom Ho. I will define certain key rate metrics, their variation used in the industry, how to calculate them, and an existing industry issue with how they are used. Additionally, I propose a novel technique to calculate key rates to mitigate the problem faced in the industry

Description: This article will examine four approaches under two different methods (eight in total) used to combat the non-additivity of key rates and will compare them under a number of rate environments.

Description: Obsolescence of physical assets and processes is a major component of operational risk for some companies. A simulation experiment shows that managers, who consider the retirement and replacement of individual assets in isolation, have rational incentives, due to risk aversion and uncertainty, to defer the replacement of assets past a time that is optimal from the perspective of the shareholder who owns the entire portfolio of such assets. This results in measurable wealth destruction, —and a demonstrable opportunity to significantly enhance a company’s value. A practical decision model for the replacement timing of fixed, physical assets, which creates wealth by minimizing the long-term consumption of scarce resources, is provided.