Overview
You'll learn what interest rate risk is and why it matters for business decisions. This overview covers the two main categories of financial risk—foreign exchange and interest rate risk—and focuses on how changes in interest rates affect a company's borrowing costs, investment returns, and key financial calculations
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In this lesson
- 0:00 Understanding risk and uncertainty in business
- 0:38 Foreign exchange and interest rate risk categories
- 1:17 How interest rates impact business decisions
- 2:14 Borrowing rates and market rate components
About this lesson
like net present value and cost of capital. You'll explore how borrowing rates work in practice, including the role of base rates and credit spreads, and understand why managing interest rate exposure is essential for organisational stability. This foundation prepares you for deeper exploration of interest rate risk management techniques covered throughout the Financial Management module.
Duration: 4m
Transcript
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