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exchange risk only happened 50 percent of time. 50 percent you might loose and another 50 percent you might gain. so, the risk part is 50 percent (we all wish that it might fall into the other 50 percent). the most conventional way is to pre-buy or pre-sell the exchange upon transaction. because it is when the exchange value closest to your expectation, instead of upon receiving of payment (when risk occurred).

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Can diversify firm specific risk at all?

Yes, firms can diversify firm-specific risk, which is the risk associated with individual companies that can be mitigated through diversification. By investing in a variety of assets across different industries and sectors, investors can reduce the impact of any single company's poor performance on their overall portfolio. However, firm-specific risk cannot be eliminated entirely; it can only be reduced through effective diversification strategies. Ultimately, systematic risk, which affects the entire market, remains unavoidable and cannot be diversified away.


Diversifying a portfolio of equity securities across sectors and markets will tend to?

Diversifying a portfolio of equity securities across sectors and markets will tend to: 1. a. increase the required risk premium. 2. b. reduce the beta of the portfolio to zero. 3. c. reduce the standard deviation of the portfolio to zero. 4. d. eliminate the market risk. 5. e. reduce the firm-specific risk.


What is specific sized contract?

Trading may be conducted only in preestablished multiples of currency units. This means that a firm wishing to hedge some aspect of its foreign exchange risk is not able to match the contract size with the size of the risk.


What are the importance of operating leverage?

help to judge risk in the firm


What is financial risk management?

Financial Risk Management is a process of evaluating and managing current and possible financial risk at a firm as a method of decreasing the firm's exposure to the risk. Financial risk managers must identify the risk, evaluate all possible remedies, and then implement the steps necessary to alleviate the risk. These risks are typically remedied by using certain financial instruments as a method of counteracting possible ramifications. Financial risk management cannot prevent a firm from all possible risks because some are unexpected and cannot be addressed quickly enough.

Related Questions

Can diversify firm specific risk at all?

Yes, firms can diversify firm-specific risk, which is the risk associated with individual companies that can be mitigated through diversification. By investing in a variety of assets across different industries and sectors, investors can reduce the impact of any single company's poor performance on their overall portfolio. However, firm-specific risk cannot be eliminated entirely; it can only be reduced through effective diversification strategies. Ultimately, systematic risk, which affects the entire market, remains unavoidable and cannot be diversified away.


Diversifying a portfolio of equity securities across sectors and markets will tend to?

Diversifying a portfolio of equity securities across sectors and markets will tend to: 1. a. increase the required risk premium. 2. b. reduce the beta of the portfolio to zero. 3. c. reduce the standard deviation of the portfolio to zero. 4. d. eliminate the market risk. 5. e. reduce the firm-specific risk.


What is specific sized contract?

Trading may be conducted only in preestablished multiples of currency units. This means that a firm wishing to hedge some aspect of its foreign exchange risk is not able to match the contract size with the size of the risk.


Why should bilges be kept clean and free oil drips?

to reduce the risk of pollution


Is it safe for a newborn to sleep in a swing?

It is not recommended for a newborn to sleep in a swing as it can increase the risk of Sudden Infant Death Syndrome (SIDS). It is safer for newborns to sleep on a firm, flat surface, such as a crib or bassinet, to reduce the risk of suffocation.


Is it safe for babies to sleep in swings?

It is not recommended for babies to sleep in swings as it can increase the risk of Sudden Infant Death Syndrome (SIDS). It is safer for babies to sleep on a firm, flat surface, such as a crib or bassinet, to reduce the risk of suffocation.


Is it safe for babies to sleep in their swing?

It is not recommended for babies to sleep in their swing as it can increase the risk of Sudden Infant Death Syndrome (SIDS). It is safer for babies to sleep on a firm, flat surface, such as a crib or bassinet, to reduce the risk of suffocation.


Reason to merge in the business combination?

Because to get through from Perfect compitition in the market, so they merge to get monopoly of specific product in the market, to reduce the risk of uncertainities and losses of their firm....


Why should a firm hedge?

A firm may hedge to reduce any substantial losses.


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Yes, it can reduce the risk of dying young.


What are the control designed to do?

Controls are designed to reduce or eliminate risk.


How do mutual funds reduce the risk of loss?

Mutual fund do not reduce the risk of loss.