Interest Rate Risk Management Essay by Neatwriter

Interest Rate Risk Management
A look at how insurance companies need to take the risk factor of volatile interest rates into account.
# 61982 | 1,151 words | 3 sources | MLA | 2005 | US


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Description:

This report discusses the volatility of interest rates and how that issue is important for insurance companies, especially those underwriting premature death risks and selling annuities. The report also presents insights into why interest rates are important for other financial institutions such as banks and corporations who hold interest related securities throughout their accounting processes. Finally, the essay offers a status of the interest rate risk management processes utilized by different corporations and the types of risk management throughout the market.

From the Paper:

"Banking is a business that deals with money and other instruments of credit. By money and instruments of credit we mean that although anything can function as money such as dollars, pennies, checks, sea shells and even rocks, it is the process of buying and selling. The idea of money presents an ideal solution for piano salesmen who no longer have to carry around their product for barter. Banks became middlemen in sales transactions in our modern way of thinking to replace the barter systems of old. The real genius in the idea of banks is the concept of interest. Banks created a new way to profit from their middle man status and these concepts arte the foundation of the credit process where banks and other institutions extend loans for longer periods of time in exchange for a payment in the form of interest. There are well over 25,000 banks and near-banks in the United States alone. "

Cite this Essay:

APA Format

Interest Rate Risk Management (2005, November 03) Retrieved February 05, 2023, from https://www.academon.com/essay/interest-rate-risk-management-61982/

MLA Format

"Interest Rate Risk Management" 03 November 2005. Web. 05 February. 2023. <https://www.academon.com/essay/interest-rate-risk-management-61982/>

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