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government bonds. However, economic risk can also create opportunities and profits for investors globally. When investing in foreign bonds, investors can profit from the fluctuation of the foreign-exchange markets and interest rates in different countries. Investors should always be aware of possible changes by the foreign regulatory authorities. Changing laws and regulations regarding sizes, types, timing, credit quality, and disclosures of bonds will immediately and directly affect investments in foreign countries. For example, if a central bank in a foreign country raises interest rates or the legislature increases taxes, the return on investment will be significantly impacted. As a result, economic risk can be reduced by utilizing various analytical and predictive tools that consider the diversification of time, exchange rates, and economic development in multiple countries, which offer different currencies, instruments, and industries.
490:
costs, debt obligations, and the ability to predict economically unsustainable circumstances should be thoroughly calculated in order to produce adequate revenues in covering those economic risks. For instance, when an
American company invests money in a manufacturing plant in Spain, the Spanish government might institute changes that negatively impact the American company's ability to operate the plant, such as changing laws or even seizing the plant, or to otherwise make it difficult for the American company to move its profits out of Spain. As a result, all possible risks that outweigh an investment's profits and outcomes need to be closely scrutinized and strategically planned before initiating the investment. Other examples of potential economic risk are steep market downturns, unexpected cost overruns, and low demand for goods.
146:
737:
enforce the netting, there will be a systematic-approach requirement, as well as a real-time look at exposure and a platform for initiating the process, which, along with the foreign cash flow uncertainty, can make the procedure seem more difficult. Having a back-up plan, such as foreign-currency accounts, will be helpful in this process. The companies that deal with inflows and outflows in the same currency will experience efficiencies and a reduction in risk by calculating the net of the inflows and outflows, and using foreign-currency account balances that will pay in part for some or all of the exposure.
557:
its host country's currency back into their domestic currency. When exchange rates appreciate or depreciate, significant, difficult-to-predict changes in the value of the foreign currency can occur. For example, U.S. companies must translate Euro, Pound, Yen, etc., statements into U.S. dollars. A foreign subsidiary's income statement and balance sheet are the two financial statements that must be translated. A subsidiary doing business in the host country usually follows that country's prescribed translation method, which may vary, depending on the subsidiary's business operations.
714:
whereas futures come in standard amounts and are based on certain commodities or assets, such as other currencies. Because futures are only available for certain currencies and time periods, they cannot entirely mitigate risk, because there is always the chance that exchange rates will move in your favor. However, the standardization of futures can be a part of what makes them attractive to some: they are well-regulated and are traded only on exchanges.
33:
502:, exchange-rate fluctuations, and commodity-price and stock-market fluctuations. It is equally critical to identify the stability of the economic system. Before initiating an investment, a firm should consider the stability of the investing sector that influences the exchange-rate changes. For instance, a service sector is less likely to have inventory swings and exchange-rate changes as compared to a large consumer sector.
729:
would move the risk to the exporter and away from itself. This technique may not be as simple as it sounds; if the exporter's currency is more volatile than that of the importer, the firm would want to avoid invoicing in that currency. If both the importer and exporter want to avoid using their own currencies, it is also fairly common to conduct the exchange using a third, more stable currency.
725:. If a company decides to purchase an option, it is able to set a rate that is "at-worst" for the transaction. If the option expires and it's out-of-the-money, the company is able to execute the transaction in the open market at a favorable rate. If a company decides to take out a forward contract, it will set a specific currency rate for a set date in the future.
573:, not subsidiary characterization. If a firm translates by the temporal method, a zero net exposed position is called fiscal balance. The temporal method cannot be achieved by the current-rate method because total assets will have to be matched by an equal amount of debt, but the equity section of the balance sheet must be translated at historical exchange rates.
771:
fluctuations around the world, firms can advantageously relocate their production to other countries. For this strategy to be effective, the new site must have lower production costs. There are many factors a firm must consider before relocating, such as a foreign nation's political and economic stability.
766:
Firms may adopt strategies other than financial hedging for managing their economic or operating exposure, by carefully selecting production sites with a mind for lowering costs, using a policy of flexible sourcing in its supply chain management, diversifying its export market across a greater number
736:
Another method to reduce exposure transaction risk is natural hedging (or netting foreign-exchange exposures), which is an efficient form of hedging because it will reduce the margin that is taken by banks when businesses exchange currencies; and it is a form of hedging that is easy to understand. To
728:
Currency invoicing refers to the practice of invoicing transactions in the currency that benefits the firm. This does not necessarily eliminate foreign exchange risk, but rather moves its burden from one party to another. A firm can invoice its imports from another country in its home currency, which
535:
When firms negotiate contracts with set prices and delivery dates in the face of a volatile foreign exchange market, with rates constantly fluctuating between initiating a transaction and its settlement, or payment, those firms face the risk of significant loss. Businesses have the goal of making all
749:
specifies when and where to use certain methods. Firms can manage translation exposure by performing a balance sheet hedge, since translation exposure arises from discrepancies between net assets and net liabilities solely from exchange rate differences. Following this logic, a firm could acquire an
556:
Translation risk deals with the risk to a company's equities, assets, liabilities, or income, any of which can change in value due to fluctuating foreign exchange rates when a portion is denominated in a foreign currency. A company doing business in a foreign country will eventually have to exchange
753:
A common technique to hedge translation risk is called balance-sheet hedging, which involves speculating on the forward market in hopes that a cash profit will be realized to offset a non-cash loss from translation. This requires an equal amount of exposed foreign currency assets and liabilities on
732:
If a firm looks to leading and lagging as a hedge, it must exercise extreme caution. Leading and lagging refer to the movement of cash inflows or outflows either forward or backward in time. For example, if a firm must pay a large sum in three months but is also set to receive a similar amount from
560:
Subsidiaries can be characterized as either an integrated or a self-sustaining foreign entity. An integrated foreign entity operates as an extension of the parent company, with cash flows and business operations that are highly interrelated with those of the parent. A self-sustaining foreign entity
493:
International investments are associated with significantly higher economic risk levels as compared to domestic investments. In international firms, economic risk heavily affects not only investors but also bondholders and shareholders, especially when dealing with the sale and purchase of foreign
489:
Another example of an economic risk is the possibility that macroeconomic conditions will influence an investment in a foreign country. Macroeconomic conditions include exchange rates, government regulations, and political stability. When financing an investment or a project, a company's operating
770:
By putting more effort into researching alternative methods for production and development, it is possible that a firm may discover more ways to produce their outputs locally rather than relying on export sources that would expose them to the foreign exchange risk. By paying attention to currency
568:
There are three translation methods: current-rate method, temporal method, and U.S. translation procedures. Under the current-rate method, all financial statement line items are translated at the "current" exchange rate. Under the temporal method, specific assets and liabilities are translated at
514:
when bidding for foreign projects, negotiating other contracts, or handling direct foreign investments. Such a risk arises from the potential of a firm to suddenly face a transnational or economic foreign-exchange risk contingent on the outcome of some contract or negotiation. For example, a firm
497:
When making a comprehensive economic forecast, several risk factors should be noted. One of the most effective strategies is to develop a set of positive and negative risks that associate with the standard economic metrics of an investment. In a macroeconomic model, major risks include changes in
713:
contracts serve similar purposes: they both allow transactions that take place in the future—for a specified price at a specified rate—that offset otherwise adverse exchange fluctuations. Forward contracts are more flexible, to an extent, because they can be customized to specific transactions,
613:
or rates of change. In foreign exchange, a relevant factor would be the rate of change of the foreign currency spot exchange rate. A variance, or spread, in exchange rates indicates enhanced risk, whereas standard deviation represents exchange-rate risk by the amount exchange rates deviate, on
552:
is the extent to which its financial reporting is affected by exchange-rate movements. As all firms generally must prepare consolidated financial statements for reporting purposes, the consolidation process for multinationals entails translating foreign assets and liabilities, or the financial
754:
the firm's consolidated balance sheet. If this is achieved for each foreign currency, the net translation exposure will be zero. A change in the exchange rates will change the value of exposed liabilities to an equal degree but opposite to the change in the value of exposed assets.
618:. A higher standard deviation would signal a greater currency risk. Because of its uniform treatment of deviations and for the automatically squaring of deviation values, economists have criticized the accuracy of standard deviation as a risk indicator. Alternatives such as
482:) to the degree that its market value is influenced by unexpected exchange-rate fluctuations, which can severely affect the firm's market share with regard to its competitors, the firm's future cash flows, and ultimately the firm's value. Economic risk can affect the
565:, which is the currency of the primary economic environment in which the subsidiary operates and in which day-to-day operations are transacted. Management must evaluate the nature of its foreign subsidiaries to determine the appropriate functional currency for each.
523:
Companies will often participate in a transaction involving more than one currency. In order to meet the legal and accounting standards of processing these transactions, companies have to translate foreign currencies involved into their domestic currency. A firm has
515:
could be waiting for a project bid to be accepted by a foreign business or government that, if accepted, would result in an immediate receivable. While waiting, the firm faces a contingent risk from the uncertainty as to whether or not that receivable will accrue.
597:
hold true—a firm or investor need not concern itself with foreign exchange risk. A deviation from one or more of the three international parity conditions generally needs to occur for there to be a significant exposure to foreign-exchange risk.
757:
Companies can also attempt to hedge translation risk by purchasing currency swaps or futures contracts. Companies can also request clients to pay in the company's domestic currency, whereby the risk is transferred to the client.
553:
statements of foreign subsidiaries, from foreign to domestic currency. While translation risk may not affect a firm's cash flows, it could have a significant impact on a firm's reported earnings and therefore its stock price.
539:
Applying public accounting rules causes firms with transnational risks to be impacted by a process known as "re-measurement". The current value of contractual cash flows are remeasured on each balance sheet.
733:
another order, it might move the date of receipt of the sum to coincide with the payment. This delay would be termed lagging. If the receipt date were moved sooner, this would be termed leading the payment.
532:
due to a contract being denominated in a foreign currency. To realize the domestic value of its foreign-denominated cash flows, the firm must exchange, or translate, the foreign currency for domestic.
656:. Using the VaR model helps risk managers determine the amount that could be lost on an investment portfolio over a certain period of time with a given probability of changes in exchange rates.
644:(VaR), which examines the tail end of a distribution of returns for changes in exchange rates, to highlight the outcomes with the worst returns. Banks in Europe have been authorized by the
441:, that firms became exposed to an increased risk from exchange rate fluctuations and began trading an increasing volume of financial derivatives in an effort to hedge their exposure. The
421:
Investors and businesses exporting or importing goods and services, or making foreign investments, have an exchange-rate risk but can take steps to manage (i.e. reduce) the risk.
418:
Foreign exchange risk also exists when the foreign subsidiary of a firm maintains financial statements in a currency other than the domestic currency of the consolidated entity.
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appropriate amount of exposed assets or liabilities to balance any outstanding discrepancy. Foreign exchange derivatives may also be used to hedge against translation exposure.
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Firms with exposure to foreign-exchange risk may use a number of hedging strategies to reduce that risk. Transaction exposure can be reduced either with the use of
703:. Each hedging strategy comes with its own benefits that may make it more suitable than another, based on the nature of the business and risks it may encounter.
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of countries, or by implementing strong research and development activities and differentiating its products in pursuit of less foreign-exchange risk exposure.
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Translation exposure is largely dependent on the translation methods required by accounting standards of the home country. For example, the United States
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of future cash flows. An example of an economic risk would be a shift in exchange rates that influences the demand for a good sold in a foreign country.
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operates in its local economic environment, independent of the parent company. Both integrated and self-sustaining foreign entities operate use
375:
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Bartram, Söhnke M.; Karolyi, G. Andrew (October 2006). "The Impact of the
Introduction of the Euro on Foreign Exchange Rate Risk Exposures".
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exchange rates consistent with the timing of the item's creation. The U.S. translation procedures differentiate foreign subsidiaries by
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Bartram, Söhnke M. (June 2004). "Linear and
Nonlinear Foreign Exchange Rate Exposures of German Nonfinancial Corporations".
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other than the domestic currency of the company. The exchange risk arises when there is a risk of an unfavourable change in
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461:, led to substantial losses from foreign exchange and led firms to pay closer attention to their foreign exchange risk.
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whenever it has contractual cash flows (receivables and payables) whose values are subject to unanticipated changes in
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1449:"Crossing the Lines: The Relation between Exchange Rate Exposure and Stock Returns in Emerging and Developed Markets"
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Many businesses were unconcerned with, and did not manage, foreign exchange risk under the international
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monetary transactions profitable ones, and the currency markets must thus be carefully observed.
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Bartram, Söhnke M.; Bodnar, Gordon M. (September 2007). "The
Foreign Exchange Exposure Puzzle".
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International
Financial Operations: Arbitrage, Hedging, Speculation, Financing and Investment
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1280:"How To Minimize Your Foreign Exchange Risk - Business FX | International Money Transfers"
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Bartram, Söhnke M. (2002). "The
Interest Rate Exposure of Nonfinancial Corporations".
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1521:"What Lies Beneath: Foreign Exchange Rate Exposure, Hedging and Cash Flows"
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Bartram, Söhnke M.; Brown, Gregory W.; Minton, Bernadette (February 2010).
1413:"Foreign Currency Exposure and Hedging: Evidence from Foreign Acquisitions"
1369:"FX hedging – Understanding Transaction vs. Translation Risk – CurrencyVue"
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1485:"Resolving the Exposure Puzzle: The Many Facets of Exchange Rate Exposure"
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Moffett, Michael H.; Stonehill, Arthur I.; Eiteman, David K. (2009).
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Bartram, Söhnke M.; Burns, Natasha; Helwege, Jean (June 2013).
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1062:"Transaction Risk Definition & Example | InvestingAnswers"
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that exists when a financial transaction is denominated in a
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983:"Economic Risk Definition & Example | InvestingAnswers"
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to employ VaR models of their own design in establishing
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Financial risk is most commonly measured in terms of the
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1225:(5th ed.). Upper Saddle River, NJ: Prentice Hall.
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The
Economics of Foreign Exchange and Global Finance
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The
Economics of Foreign Exchange and Global Finance
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1447:Bartram, Söhnke M.; Bodnar, Gordon M. (June 2012).
1145:"Capital Surplus and Reserves on the Balance Sheet"
852:
Managing Global
Financial and Foreign Exchange Risk
57:. Unsourced material may be challenged and removed.
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904:
827:Fundamentals of Multinational Finance, 3rd Edition
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626:have been advanced for measuring financial risk.
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1194:International Financial Management, 6th Edition
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903:Dunn, Robert M. Jr.; Mutti, John H. (2004).
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1669:Journal of International Money and Finance
1456:Journal of International Money and Finance
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614:average, from the mean exchange rate in a
445:of the 1990s and early 2000s, such as the
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1192:Eun, Cheol S.; Resnick, Bruce G. (2011).
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117:Learn how and when to remove this message
1221:Options, futures & other derivatives
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762:Strategies other than financial hedging
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1390:"Accounting for Foreign Currency Loss"
961:. New Fetter Lane, London: Routledge.
854:. Hoboken, NJ: John Wiley & Sons.
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1555:Bartram, Söhnke M. (December 2007).
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959:The Japanese Foreign Exchange Market
936:. New York, NY: Palgrave Macmillan.
907:International Economics, 6th Edition
882:. New York, NY: Palgrave Macmillan.
439:collapse of the Bretton Woods system
55:adding citations to reliable sources
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1339:(4th ed.). London: Routledge.
1303:. Upper Saddle River, NJ: Pearson.
1196:. New York, NY: McGraw-Hill/Irwin.
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1519:Bartram, Söhnke M. (August 2008).
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1301:International financial management
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934:International Finance, 3rd Edition
802:International Finance, 4th Edition
747:Federal Accounting Standards Board
646:Bank for International Settlements
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1034:"Assessing Economic Risk Factors"
609:of a quantity such as percentage
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433:. It was not until the switch to
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781:Privatized foreign currency risk
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2154:Asset and liability management
1576:10.1016/j.jcorpfin.2007.05.002
1540:10.1016/j.jbankfin.2007.07.013
1528:Journal of Banking and Finance
1492:Journal of Financial Economics
1468:10.1016/j.jimonfin.2012.01.011
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829:. Boston, MA: Addison-Wesley.
465:Types of foreign exchange risk
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1681:10.1016/s0261-5606(04)00018-x
1652:10.1016/j.jempfin.2006.01.002
1504:10.1016/j.jfineco.2009.09.002
1299:Siddaiah, Thummuluri (2010).
1166:. Berlin, Germany: Springer.
850:Homaifar, Ghassem A. (2004).
786:
455:1998 Russian financial crisis
1640:Journal of Empirical Finance
1564:Journal of Corporate Finance
1420:Quarterly Journal of Finance
681:foreign exchange derivatives
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1929:Operational risk management
911:. New York, NY: Routledge.
804:. New York, NY: Routledge.
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595:international Fisher effect
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2101:Proportional hazards model
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1615:10.1108/03074350710776226
1432:10.1142/S2010139213500109
1335:Levi, Maurice D. (2005).
800:Levi, Maurice D. (2005).
2047:First-hitting-time model
2012:Arbitrage pricing theory
2425:Foreign exchange market
2356:Stress test (financial)
2062:Modern portfolio theory
1719:10.1023/A:1015024825914
1710:10.1023/a:1015024825914
1698:European Finance Review
932:Pilbeam, Keith (2006).
878:Moosa, Imad A. (2003).
587:purchasing power parity
435:floating exchange rates
66:"Foreign exchange risk"
957:Reszat, Beate (2003).
666:Foreign exchange hedge
2430:International finance
2394:Investment management
2296:Investment management
2022:Replicating portfolio
1798:Sovereign credit risk
1337:International finance
1162:Wang, Peijie (2005).
1109:Wang, Peijie (2005).
459:Argentine peso crisis
451:Asian currency crisis
389:Foreign exchange risk
2399:Mathematical finance
2331:Risk-return spectrum
2321:Mathematical finance
2276:Fundamental analysis
2209:Exchange traded fund
1793:Consumer credit risk
1066:investinganswers.com
1038:International Banker
987:investinganswers.com
652:for given levels of
650:capital requirements
591:interest rate parity
431:Bretton Woods system
51:improve this article
2389:Financial economics
2346:Statistical finance
2112:Value-at-Risk (VaR)
2017:Black–Scholes model
1857:Holding period risk
1217:Hull, John (2003).
1014:www.readyratios.com
741:Translation hedging
671:Transaction hedging
571:functional currency
563:functional currency
447:Mexican peso crisis
2366:Structured product
2361:Structured finance
2341:Speculative attack
2027:Cash flow matching
1990:Non-financial risk
1887:Interest rate risk
1813:Concentration risk
1593:Managerial Finance
1256:"Transaction Risk"
1113:. Springer Berlin.
1086:"Transaction risk"
607:standard deviation
397:exchange rate risk
341:Non-financial risk
196:Interest rate risk
168:Concentration risk
18:Exchange rate risk
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2179:Corporate finance
2174:Capital structure
2128:Cash flow at risk
2124:Liquidity at risk
2097:Survival analysis
1998:
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1944:Reputational risk
1818:Credit derivative
1203:978-0-07-803465-7
1173:978-3-540-21237-9
1126:"Temporal Method"
968:978-0-203-22254-6
943:978-1-4039-4837-3
918:978-0-415-31154-0
889:978-0-333-99859-5
861:978-0-471-28115-3
836:978-0-321-54164-2
811:978-0-415-30900-4
723:forward contracts
693:futures contracts
685:forward contracts
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300:Reputational risk
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16:(Redirected from
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2281:Growth investing
2199:Enterprise value
2149:Asset allocation
2132:Earnings at risk
2114:and extensions (
2057:Market portfolio
1921:Operational risk
1906:Refinancing risk
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1245:
1244:
1224:
1214:
1208:
1207:
1189:
1178:
1177:
1159:
1153:
1152:
1143:Kennon, Joshua.
1140:
1134:
1133:
1121:
1115:
1114:
1106:
1100:
1099:
1097:
1096:
1082:
1076:
1075:
1073:
1072:
1058:
1049:
1048:
1046:
1045:
1030:
1024:
1023:
1021:
1020:
1006:
997:
996:
994:
993:
979:
973:
972:
954:
948:
947:
929:
923:
922:
910:
900:
894:
893:
875:
866:
865:
847:
841:
840:
822:
816:
815:
797:
636:Earnings at risk
550:translation risk
544:Translation risk
526:transaction risk
519:Transaction risk
437:, following the
378:
371:
364:
305:Operational risk
244:Refinancing risk
148:
129:
128:
122:
115:
111:
108:
102:
100:
59:
35:
27:
21:
2445:
2444:
2440:
2439:
2438:
2436:
2435:
2434:
2410:
2409:
2408:
2403:
2380:
2316:Systematic risk
2214:Expected return
2194:Economic bubble
2189:Diversification
2184:Cost of capital
2137:
1994:
1963:
1915:
1897:Volatility risk
1861:Price area risk
1827:
1803:Settlement risk
1772:
1763:
1559:
1523:
1487:
1451:
1415:
1407:
1405:Further reading
1402:
1401:
1386:
1382:
1373:
1371:
1367:
1366:
1362:
1347:
1333:
1326:
1311:
1297:
1293:
1284:
1282:
1278:
1277:
1273:
1264:
1262:
1252:
1248:
1233:
1215:
1211:
1204:
1190:
1181:
1174:
1160:
1156:
1141:
1137:
1122:
1118:
1107:
1103:
1094:
1092:
1084:
1083:
1079:
1070:
1068:
1060:
1059:
1052:
1043:
1041:
1032:
1031:
1027:
1018:
1016:
1010:"Economic Risk"
1008:
1007:
1000:
991:
989:
981:
980:
976:
969:
955:
951:
944:
930:
926:
919:
901:
897:
890:
876:
869:
862:
848:
844:
837:
823:
819:
812:
798:
794:
789:
777:
764:
743:
673:
668:
662:
638:
632:
579:
546:
521:
512:contingent risk
508:
506:Contingent risk
478:(also known as
472:
467:
443:currency crises
427:
391:(also known as
382:
263:Investment risk
221:Volatility risk
163:Settlement risk
123:
112:
106:
103:
60:
58:
48:
36:
23:
22:
15:
12:
11:
5:
2443:
2433:
2432:
2427:
2422:
2405:
2404:
2402:
2401:
2396:
2391:
2385:
2382:
2381:
2379:
2378:
2373:
2368:
2363:
2358:
2353:
2348:
2343:
2338:
2333:
2328:
2323:
2318:
2313:
2308:
2303:
2298:
2293:
2288:
2283:
2278:
2273:
2272:
2271:
2266:
2261:
2256:
2251:
2246:
2241:
2236:
2231:
2226:
2216:
2211:
2206:
2201:
2196:
2191:
2186:
2181:
2176:
2171:
2166:
2161:
2156:
2151:
2145:
2143:
2142:Basic concepts
2139:
2138:
2136:
2135:
2120:Margin at risk
2116:Profit at risk
2109:
2107:Tracking error
2104:
2094:
2089:
2084:
2079:
2077:Risk-free rate
2074:
2069:
2064:
2059:
2054:
2049:
2044:
2039:
2034:
2029:
2024:
2019:
2014:
2008:
2006:
2000:
1999:
1996:
1995:
1993:
1992:
1987:
1982:
1977:
1975:Execution risk
1971:
1969:
1965:
1964:
1962:
1961:
1956:
1954:Political risk
1951:
1946:
1941:
1936:
1931:
1925:
1923:
1917:
1916:
1914:
1913:
1902:Liquidity risk
1899:
1894:
1892:Inflation risk
1889:
1884:
1882:Margining risk
1879:
1874:
1872:Valuation risk
1869:
1864:
1841:Commodity risk
1837:
1835:
1829:
1828:
1826:
1825:
1823:Securitization
1820:
1815:
1810:
1805:
1800:
1795:
1789:
1787:
1778:
1774:
1773:
1766:Financial risk
1762:
1761:
1754:
1747:
1739:
1733:
1732:
1704:(1): 101–125.
1693:
1675:(4): 673–699.
1664:
1635:
1606:10.1.1.550.282
1599:(9): 642–666.
1588:
1570:(5): 981–994.
1552:
1516:
1498:(2): 148–173.
1480:
1462:(4): 766–792.
1444:
1406:
1403:
1400:
1399:
1380:
1360:
1346:978-0415309004
1345:
1324:
1309:
1291:
1271:
1246:
1232:978-0130090560
1231:
1209:
1202:
1179:
1172:
1154:
1135:
1124:Kenton, Will.
1116:
1101:
1077:
1050:
1025:
998:
974:
967:
949:
942:
924:
917:
895:
888:
867:
860:
842:
835:
817:
810:
791:
790:
788:
785:
784:
783:
776:
773:
763:
760:
742:
739:
672:
669:
661:
658:
631:
628:
578:
577:Measuring risk
575:
545:
542:
530:exchange rates
520:
517:
507:
504:
471:
468:
466:
463:
426:
423:
405:financial risk
384:
383:
381:
380:
373:
366:
358:
355:
354:
353:
352:
350:Stranded asset
344:
343:
337:
336:
330:
329:
328:
327:
322:
317:
315:Political risk
312:
307:
302:
294:
293:
287:
286:
285:
284:
282:Valuation risk
279:
277:Execution risk
274:
266:
265:
259:
258:
257:
256:
254:Margining risk
251:
246:
238:
237:
235:Liquidity risk
231:
230:
229:
228:
223:
218:
216:Commodity risk
213:
208:
203:
201:Inflation risk
198:
190:
189:
183:
182:
181:
180:
175:
173:Sovereign risk
170:
165:
157:
156:
150:
149:
141:
140:
138:Financial risk
134:
133:
125:
124:
39:
37:
30:
9:
6:
4:
3:
2:
2442:
2431:
2428:
2426:
2423:
2421:
2418:
2417:
2415:
2400:
2397:
2395:
2392:
2390:
2387:
2386:
2383:
2377:
2374:
2372:
2371:Systemic risk
2369:
2367:
2364:
2362:
2359:
2357:
2354:
2352:
2349:
2347:
2344:
2342:
2339:
2337:
2334:
2332:
2329:
2327:
2324:
2322:
2319:
2317:
2314:
2312:
2309:
2307:
2304:
2302:
2299:
2297:
2294:
2292:
2289:
2287:
2284:
2282:
2279:
2277:
2274:
2270:
2267:
2265:
2262:
2260:
2257:
2255:
2252:
2250:
2247:
2245:
2242:
2240:
2237:
2235:
2232:
2230:
2227:
2225:
2222:
2221:
2220:
2217:
2215:
2212:
2210:
2207:
2205:
2202:
2200:
2197:
2195:
2192:
2190:
2187:
2185:
2182:
2180:
2177:
2175:
2172:
2170:
2169:Capital asset
2167:
2165:
2162:
2160:
2159:Asset pricing
2157:
2155:
2152:
2150:
2147:
2146:
2144:
2140:
2133:
2129:
2125:
2121:
2117:
2113:
2110:
2108:
2105:
2102:
2098:
2095:
2093:
2092:Sortino ratio
2090:
2088:
2085:
2083:
2080:
2078:
2075:
2073:
2070:
2068:
2065:
2063:
2060:
2058:
2055:
2053:
2050:
2048:
2045:
2043:
2040:
2038:
2035:
2033:
2030:
2028:
2025:
2023:
2020:
2018:
2015:
2013:
2010:
2009:
2007:
2005:
2001:
1991:
1988:
1986:
1985:Systemic risk
1983:
1981:
1978:
1976:
1973:
1972:
1970:
1966:
1960:
1957:
1955:
1952:
1950:
1947:
1945:
1942:
1940:
1937:
1935:
1934:Business risk
1932:
1930:
1927:
1926:
1924:
1922:
1918:
1911:
1907:
1903:
1900:
1898:
1895:
1893:
1890:
1888:
1885:
1883:
1880:
1878:
1875:
1873:
1870:
1868:
1865:
1862:
1858:
1854:
1850:
1846:
1842:
1839:
1838:
1836:
1834:
1830:
1824:
1821:
1819:
1816:
1814:
1811:
1809:
1806:
1804:
1801:
1799:
1796:
1794:
1791:
1790:
1788:
1786:
1782:
1779:
1775:
1771:
1767:
1760:
1755:
1753:
1748:
1746:
1741:
1740:
1737:
1729:
1725:
1720:
1715:
1711:
1707:
1703:
1699:
1694:
1690:
1686:
1682:
1678:
1674:
1670:
1665:
1661:
1657:
1653:
1649:
1645:
1641:
1636:
1632:
1628:
1624:
1620:
1616:
1612:
1607:
1602:
1598:
1594:
1589:
1585:
1581:
1577:
1573:
1569:
1565:
1558:
1553:
1549:
1545:
1541:
1537:
1533:
1529:
1522:
1517:
1513:
1509:
1505:
1501:
1497:
1493:
1486:
1481:
1477:
1473:
1469:
1465:
1461:
1457:
1450:
1445:
1441:
1437:
1433:
1429:
1425:
1421:
1414:
1409:
1408:
1395:
1391:
1384:
1370:
1364:
1356:
1352:
1348:
1342:
1338:
1331:
1329:
1320:
1316:
1312:
1310:9788131717202
1306:
1302:
1295:
1281:
1275:
1261:
1257:
1254:Chen, James.
1250:
1242:
1238:
1234:
1228:
1223:
1222:
1213:
1205:
1199:
1195:
1188:
1186:
1184:
1175:
1169:
1165:
1158:
1150:
1146:
1139:
1131:
1127:
1120:
1112:
1105:
1091:
1087:
1081:
1067:
1063:
1057:
1055:
1039:
1035:
1029:
1015:
1011:
1005:
1003:
988:
984:
978:
970:
964:
960:
953:
945:
939:
935:
928:
920:
914:
909:
908:
899:
891:
885:
881:
874:
872:
863:
857:
853:
846:
838:
832:
828:
821:
813:
807:
803:
796:
792:
782:
779:
778:
772:
768:
759:
755:
751:
748:
738:
734:
730:
726:
724:
720:
715:
712:
708:
704:
702:
698:
694:
690:
686:
682:
678:
677:money markets
667:
660:Managing risk
657:
655:
651:
647:
643:
642:value at risk
637:
630:Value at risk
627:
625:
621:
617:
612:
608:
604:
599:
596:
592:
588:
584:
574:
572:
566:
564:
558:
554:
551:
541:
537:
533:
531:
527:
516:
513:
503:
501:
495:
491:
487:
485:
484:present value
481:
480:forecast risk
477:
476:economic risk
470:Economic risk
462:
460:
456:
452:
448:
444:
440:
436:
432:
422:
419:
416:
414:
413:exchange rate
410:
406:
402:
401:currency risk
398:
394:
390:
379:
374:
372:
367:
365:
360:
359:
357:
356:
351:
348:
347:
346:
345:
342:
339:
338:
335:
332:
331:
326:
323:
321:
318:
316:
313:
311:
308:
306:
303:
301:
298:
297:
296:
295:
292:
291:Business risk
289:
288:
283:
280:
278:
275:
273:
270:
269:
268:
267:
264:
261:
260:
255:
252:
250:
247:
245:
242:
241:
240:
239:
236:
233:
232:
227:
226:Systemic risk
224:
222:
219:
217:
214:
212:
209:
207:
206:Currency risk
204:
202:
199:
197:
194:
193:
192:
191:
188:
185:
184:
179:
176:
174:
171:
169:
166:
164:
161:
160:
159:
158:
155:
152:
151:
147:
143:
142:
139:
136:
135:
132:Categories of
131:
130:
121:
118:
110:
99:
96:
92:
89:
85:
82:
78:
75:
71:
68: –
67:
63:
62:Find sources:
56:
52:
46:
45:
40:This article
38:
34:
29:
28:
19:
2326:Moral hazard
2311:Risk of ruin
2087:Sharpe ratio
1949:Country risk
1910:Deposit risk
1876:
1808:Default risk
1701:
1697:
1672:
1668:
1643:
1639:
1596:
1592:
1567:
1563:
1531:
1527:
1495:
1491:
1459:
1455:
1423:
1419:
1394:ProFormative
1393:
1383:
1372:. Retrieved
1363:
1336:
1300:
1294:
1283:. Retrieved
1274:
1263:. Retrieved
1260:Investopedia
1259:
1249:
1220:
1212:
1193:
1163:
1157:
1148:
1138:
1130:Investopedia
1129:
1119:
1110:
1104:
1093:. Retrieved
1089:
1080:
1069:. Retrieved
1065:
1042:. Retrieved
1040:. 2017-01-02
1037:
1028:
1017:. Retrieved
1013:
990:. Retrieved
986:
977:
958:
952:
933:
927:
906:
898:
879:
851:
845:
826:
820:
801:
795:
769:
765:
756:
752:
744:
735:
731:
727:
716:
705:
674:
639:
624:semivariance
600:
580:
567:
559:
555:
549:
547:
538:
534:
525:
522:
511:
509:
496:
492:
488:
479:
475:
473:
428:
420:
417:
400:
396:
392:
388:
387:
325:Moral hazard
310:Country risk
249:Deposit risk
178:Default risk
113:
107:January 2019
104:
94:
87:
80:
73:
61:
49:Please help
44:verification
41:
2420:Market risk
2376:Toxic asset
2336:Speculation
2269:social work
2254:engineering
2082:Risk parity
2067:Omega ratio
1980:Profit risk
1867:Equity risk
1845:Volume risk
1833:Market risk
1785:Credit risk
1426:(2): 1–20.
1149:the balance
654:market risk
585:—such that
510:A firm has
474:A firm has
334:Profit risk
211:Equity risk
187:Market risk
154:Credit risk
2414:Categories
1959:Legal risk
1939:Model risk
1853:Shape risk
1849:Basis risk
1777:Categories
1374:2018-12-13
1285:2018-12-13
1265:2018-12-13
1095:2018-12-13
1071:2018-12-13
1044:2018-12-13
1019:2018-12-13
992:2018-12-13
787:References
664:See also:
634:See also:
593:, and the
457:, and the
320:Legal risk
272:Model risk
77:newspapers
2306:Risk pool
2219:Financial
1623:154570237
1601:CiteSeerX
1319:430736596
683:—such as
583:efficient
548:A firm's
2229:analysis
2164:Bad debt
2042:Drawdown
2004:Modeling
1355:55801025
1241:49355599
775:See also
603:variance
409:currency
2244:betting
2234:analyst
2224:adviser
1877:FX risk
1512:1429286
1476:1983215
1440:1116409
719:options
711:futures
707:Forward
701:netting
689:options
611:returns
425:History
403:) is a
393:FX risk
91:scholar
2286:Hazard
2037:Copula
1904:(e.g.
1843:(e.g.
1728:327660
1726:
1689:327660
1687:
1660:299641
1658:
1631:891887
1629:
1621:
1603:
1584:985413
1582:
1548:905087
1546:
1510:
1474:
1438:
1353:
1343:
1317:
1307:
1239:
1229:
1200:
1170:
1090:Kantox
965:
940:
915:
886:
858:
833:
808:
695:, and
93:
86:
79:
72:
64:
2291:Hedge
2249:crime
2239:asset
2072:RAROC
1968:Other
1619:S2CID
1560:(PDF)
1524:(PDF)
1488:(PDF)
1452:(PDF)
1416:(PDF)
697:swaps
98:JSTOR
84:books
2301:Risk
2264:risk
1768:and
1724:SSRN
1685:SSRN
1656:SSRN
1627:SSRN
1580:SSRN
1544:SSRN
1508:SSRN
1472:SSRN
1436:SSRN
1351:OCLC
1341:ISBN
1315:OCLC
1305:ISBN
1237:OCLC
1227:ISBN
1198:ISBN
1168:ISBN
963:ISBN
938:ISBN
913:ISBN
884:ISBN
856:ISBN
831:ISBN
806:ISBN
721:and
709:and
622:and
70:news
2259:law
2204:ESG
1714:hdl
1706:doi
1677:doi
1648:doi
1611:doi
1572:doi
1536:doi
1500:doi
1464:doi
1428:doi
605:or
500:GDP
399:or
53:by
2416::
2130:,
2126:,
2122:,
2118:,
1908:,
1859:,
1855:,
1851:,
1847:,
1722:.
1712:.
1700:.
1683:.
1673:23
1671:.
1654:.
1644:13
1642:.
1625:.
1617:.
1609:.
1597:33
1595:.
1578:.
1568:13
1566:.
1562:.
1542:.
1532:32
1530:.
1526:.
1506:.
1496:95
1494:.
1490:.
1470:.
1460:31
1458:.
1454:.
1434:.
1422:.
1418:.
1392:.
1349:.
1327:^
1313:.
1258:.
1235:.
1182:^
1147:.
1128:.
1088:.
1064:.
1053:^
1036:.
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