Abstract

American Electric Power Company (AEP) is one of the largest electric public utility holding companies in the US. The company faces many financial risks. These include commodity price risks, interest rate risks, foreign exchange risks, liquidity risks and credit risks. The case outlines the risks and the risk management policies AEP employs to deal with them.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

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Keywords

American Electric Power Company, Interest rate risk, Financial risk management, Foreign exchange risk, Derivatives contracts, Liquidity risk, Credit risk, Wholesale energy market, US electric power company, Commodity price risk, US electric industry