Non-Portfolio Risk Calculator Guide

How to Use the Non-Portfolio Risk Calculator

Step-by-Step Guide

1. 1
   Access the Calculator

   Navigate to the Non-Portfolio Risk Calculator to begin your analysis.

   • Visit the calculator at younginvestorcalculator.com/non-portfolio-risk.
   • Prepare bond prospectuses, loan agreements, or market data for Q1 2025.
   • Source: Bond terms from gse.com.gh, T-bill rates from bog.gov.gh, or issuer financials from banks (e.g., Ecobank, Stanbic).
   • Tip: Bookmark the calculator page and organize asset documents for quick access.
2. 2
   Select Risk Metric

   Choose the risk metric based on your analysis needs.

   • Options include Credit Spread, Probability of Default (PD), Expected Loss (EL), Modified Duration, Convexity, or Liquidity Risk.
   • Source: Select based on asset type (e.g., Credit Spread for corporate bonds, Duration for interest rate risk). No external data required for selection.
   • Tip: Use EL for credit risk budgeting, Duration for interest rate sensitivity, or Liquidity Risk for marketability concerns.
3. 3
   Enter Asset-Specific Inputs

   Input data for the selected asset (e.g., bond, loan) to calculate risk metrics.

   • Credit Risk Inputs: Corporate Yield (6–10%), Risk-Free Yield (3–5% from bog.gov.gh), PD (1–5%), LGD (40–60%), EAD (asset value).
   • Bond Risk Inputs: Bond Price, Macaulay Duration (2–5 years), Yield to Maturity (YTM), Yield Change (0.5–2%) from GSE or prospectuses.
   • Liquidity Risk Inputs: Bid and Ask Prices from GSE or OTC quotes (e.g., IC Securities).
   • Source: Bond prospectuses, gse.com.gh, or banks. PD/LGD from credit ratings (e.g., GCR Ratings) or bank assessments.
   • Tip: Use conservative PD/LGD estimates if data is unavailable. Verify bond terms for accuracy.
4. 4
   Calculate and Interpret Results

   Submit data to compute risk metrics and interpret outputs for decision-making.

   • Results:
     • Credit Spread: Risk premium (e.g., 2.50%) over risk-free rate.
     • Expected Loss: PD × LGD × EAD (e.g., GHS 2,000).
     • Modified Duration: Interest rate sensitivity (e.g., 2.80 years).
     • Liquidity Risk: Bid-Ask Spread (e.g., GHS 0.50).
   • Source: Compare results to benchmarks from spglobal.com or npra.gov.gh.
   • Tip: Use EL for credit risk assessment, Duration for interest rate risk, and Liquidity Risk for trading decisions. Combine with qualitative analysis (e.g., issuer stability, Ghana’s economic outlook).