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's experience, a comprehensive definition of risk.Risk is not measurable uncertainty nor volatility. Risk is a three part concept … exposure while of pursuing objectives in an uncertain environment; (2) risk is ontological uncertainty, the unknown unknown …
Persistent link: https://www.econbiz.de/10012998705
contagion effects when making investment decisions, reduces his risk exposure as he becomes more sensitive to risk, and that his …
Persistent link: https://www.econbiz.de/10012969492
Investment decision making methodologies like Discounted Cash Flow (DCF) require forecasts. However, what if the future … option theory, to value uncertainty. However, scenario analyses and real options are rarely used in analyst reports meant for … external investors. Most investment analyst reports still use forecasts and DCF as the basis for their buy-sell-hold advice. In …
Persistent link: https://www.econbiz.de/10012930173
Since borrowers want minimal pressure to repay early while depositors want minimal constraints on withdrawals, banks typically borrow short to lend long. This is known as duration mismatch. To mitigate the risks, banks are required to hold capital buffers, which are intended to cover all losses...
Persistent link: https://www.econbiz.de/10012828143
Systematic mispricing primarily affects speculative stocks and predominantly results in overpricing, predicting lower average returns. Because speculative stocks overlap with stocks deemed risky by rational models, failing to control for exposure to systematic mispricing can bias tests of...
Persistent link: https://www.econbiz.de/10012388392
We develop a dynamic Q-theoretic framework that investigates the interaction among investment, financing, carbon …) financing constraints hinder carbon emission reduction and investment; (2) carbon emission reduction enhances firm value and … investment, postpones payout, increases external equity financing, and strengthens incentives for hedging relative to the …
Persistent link: https://www.econbiz.de/10014352946
system's degree of uncertainty/predictability and stress level within it. Four main quadrants are identified: Ad hoc …
Persistent link: https://www.econbiz.de/10011516605
Persistent link: https://www.econbiz.de/10013086247
results suggest that interest rate uncertainty depresses financially constrained firms' investment in spite of hedging …We revisit the evidence on real effects of uncertainty shocks in the context of interest rate uncertainty, which can be … hedged in the swap market. We document that adverse movements in interest rate uncertainty predict significant slowdowns in …
Persistent link: https://www.econbiz.de/10012970275
The interaction of capital and risk for trading and treasury units is of primary interest in the corporate governance of banks as it links operational profitability and strategic risk management. During the financial crisis, several banks' trading units suffered significantly higher losses than...
Persistent link: https://www.econbiz.de/10013019606