The back-to-basics trend positioned utilities and other energy companies to lead the way out of Wall Street’s mess. Despite a perfect storm of rising costs and a weakening economy, utilities and...
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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