Assignment: Assess Credit Risk
Review the resources and research credit risk, so you will better understand the benefits and detractors of credit risk. Respond to the following points:
1. Evaluate the need for credit risk and current strategies for measuring and managing such a practice within financial institutions.
2. Support the value of credit derivatives for financial institutions. Ensure you include the impacts of interest rates on derivative products.
3. Identify the positives and negatives of credit risk and how could you apply credit to your benefit?
Credit Risk:
To remain competitive within the global marketplace, financial institutions are looking at new ways to leverage and manage credit. Such methods include increasing risk exposure with borrowing firms and the packaging of derivatives into new products. The result, at times, opens the door for unforeseen risks and regulations. Such unknowns can have a devastating impact on financial institutions and hosting nations. The key is to ascertain the successes and weaknesses of past credit-based strategies on financial institutions. Therefore, the intent of this assignment is to target and expand upon these identified best practices.
Format your assignment according to the following formatting requirements:
1. The answer should be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
2. The response also includes a cover page containing the title of the assignment, the student's name, the course title, and the date. The cover page is not included in the required page length.
3. Also include a reference page. The Citations and references should follow APA format. The reference page is not included in the required page length.