TODAY THE ELECTRIC UTILITY INDUSTRY HURTLES TOWARD massive restructuring. This fervor is not surprising as it appears society has become convinced that market forces can work better than a...
Risk-Management Principles for the Utility CEO
- capital. The actual RAROC is computed by dividing P&L net of interest charges by value-at-risk from the trading activity. Typical one-year RAROC hurdles are near 25 percent p.a.
- See Shimko, "Derivatives in the Board Room," Public Utilities Fortnightly, June 1, 2002.
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