www.freightmetrics.com 37 Step 6: Risk Inference Using the distribution of cash flow results from Step 5, find the cash flow estimate corresponding to
{"Image DocumentName": "General benefits of Monte-Carlo based methods", "Image ImageDescription": "Risk Management in Shipping Measuring Market Risk with Fr8MetricsTM Benefits of the Fr8MetricsTM Methodology. General benefits of Monte-Carlo based methods. Flexibility to support a wide range of stochastic processes. Not restrictive in terms of distributional assumptions. Ability to incorporate correlations among risk factors. Ability to incorporate decision rules along the simulated paths (e.g. exercise of charter options). Particular benefits of the Fr8MetricsTM methodology. Utilizes stochastic models specifically developed to capture freight rate dynamics. Reveals diversification effects across shipping assets, as well as between shipping and financial exposures. Provides a framework for monitoring derivatives, developing hedging strategies and assessing hedge effectiveness.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}