Question
I need help withliability management at general motors case study solution: 1. How will changes in the interest rates affect GM's business? Apart from buying
I need help withliability management at general motors case study solution:
1. How will changes in the interest rates affect GM's business? Apart from buying derivatives, how could GM control exposure to interest rate fluctuations? 2. How does managing interest rate exposure differ for a bank from and a corporate like GM? 3. Discuss GM's stated risk management policies, how do you interpret these policies? 4. What is a 'rate view'? What role does it play in the liability management policy at GM? 5. Explain each of the interest rate derivatives that Bello is considering. How do they work? How would they affect the incremental interest rate exposure of the five-year fixed-rate note that GM is about to issue? Assuming that each of the instruments is fairly priced, what should Bello recommend? Why? 6. As a director or institutional investor in GM, how would you evaluation the liability management program at GM?
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