Doc 8 Gentzoglanis En

7/30/2019 Doc 8 Gentzoglanis En

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Risk Management & BusinessRisk Management & BusinessStrategies in theStrategies in the

Telecommunications IndustryTelecommunications Industry

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Table of ContentsTable of Contents


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Risk Management and valueRisk Management and value


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Risk Management and costRisk Management and cost

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Types of RiskTypes of Risk

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Summary of types of Risk and RiskSummary of types of Risk and Risk

ManagementManagement

Market risk Operational Liquidity risk

Telecommunications industry risk identification and its management

CRegulatory


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Types of RiskTypes of Risk ""

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Risk identification and Risk Comparisons -

Transaction, Economic & Operating RiskDate of change in the exchange rate

Accounting risk exposure

Transaction risk exposure

Operating risk exposure

Time

Changes in equity in Consolidated

Financial Statements due to changesin the exchange rate

Changes in expected future cash flows due to

unexpected changes in the exchange rate

Impact of settling outstanding obligations entered into before change in

the exchange rate but settled after change in exchange rates


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Risk identification and riskRisk identification and risk

tolerancetolerance

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A Risk map or risk IDA Risk map or risk ID

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A Risk map or risk ID (1)A Risk map or risk ID (1)

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Refinement of identifiable risks (2)Refinement of identifiable risks (2)

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1/

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Further refinement of identifiableFurther refinement of identifiable

risks (3)risks (3)

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Managing financial risk: types ofManaging financial risk: types of

hedginghedging

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Managing financial risk: alternativeManaging financial risk: alternative

hedging strategieshedging strategies ,,

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Hypothetical example of managing financial risk44

1.68 1.70 1.74 1.761.72 1.821.801.78 1.861.84

Cost in US dollars of

Telcos 1,000,000 A/P

1.68

Ending spot exchange rate (US$/)

1.70

1.72

1.74

1.76

1.78

1.80

1.82

1.84

Uncovered costs

whatever the ending

spot rate is in 90 days

Forward contract hedgelocks in a cost of $1,754,000

Money market hedge

Locks in a cost of $1,781,294

Forward rate

is $1.7540/

Call option strike

price of $1.75/

Call option hedge


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Types of hedging, strategy choiceTypes of hedging, strategy choice

and outcomeand outcome

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Risk management in practiceRisk management in practice

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Risk management in theRisk management in the

telecommunicationstelecommunicationsindustryindustry

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telecommunications industrytelecommunications industry

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telecommunications industrytelecommunications industry 00

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telecommunications industrytelecommunications industry "+0=3"+0=3

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telecommunications industrytelecommunications industry "+0=3"+0=3

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TELUSTELUS risk and controlrisk and control

assessment processassessment process

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Business riskBusiness risk


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TELUS definition of businessTELUS definition of business

riskrisk ,+0=3",+0=3"

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Principal risks that could affectPrincipal risks that could affect

TELUSTELUS future business resultsfuture business results

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CC

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Financial risk and itsFinancial risk and its

managementmanagement


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Financial risk and its managementFinancial risk and its management +0=3+0=3

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Financial risk and its managementFinancial risk and its management +0=3+0=3

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Financial risk and its managementFinancial risk and its management

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Financial risk and its managementFinancial risk and its management 4+0=3%4+0=3%

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Financial risk and its managementFinancial risk and its management

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Financial risk and its managementFinancial risk and its management )%)%

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Financial risk and its managementFinancial risk and its management ))

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Financial risk and its managementFinancial risk and its management ))))

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Swaption +*@"@886"

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telecommunications industrytelecommunications industry , 4

$ $ )$ 3$ $ *

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CONCLUSIONSCONCLUSIONS *

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Doc 8 Gentzoglanis En