Showing 1 - 10 of 301
Assuming a risk-neutral bank and assuming household utility to be exponential, we show how under information symmetry the covariance of income and loan repayments may explain higher household borrowings than in the case without default option. Under ex post information asymmetry and positive...
Persistent link: https://www.econbiz.de/10010426364
A healthy financial system encourages the efficient allocation of capital and risk. The collapse of the house price bubble led to the financial crisis that started in 2007. There is a large empirical literature concerning the relation between asset price bubbles and financial crises. I evaluate...
Persistent link: https://www.econbiz.de/10003936616
We use forward-looking and exogenous measures of output price uncertainty to examine the effect of price uncertainty on firm-level capital investment, risk management, and debt issuance. The effects of uncertainty vary significantly by firm size. When faced with high price uncertainty, large...
Persistent link: https://www.econbiz.de/10012974060
The problem studied in this paper consists in the fact that the social and financial risks of investments in innovations are managed in isolation, which leads to limited results (reduces certain risks but raises other risks). This paper is devoted to the search for a new strategy of managing the...
Persistent link: https://www.econbiz.de/10013359127
We analyse how money as a store of value affects the decisions of a representative household under diversifiable and non-diversifiable risks. given that the central bank successfully stabilizes the rate of inflation at a low level. Assuming exponential utility allows us to derive an explicit...
Persistent link: https://www.econbiz.de/10010426370
Persistent link: https://www.econbiz.de/10011735726
Combinations of a six-Currency portfolio are studied for a two-year period to access the reliability of “value at risk” approach to measuring the transaction exposure. The values at risk for each currency and for every additional currency portfolio are estimated for each year. The outcomes...
Persistent link: https://www.econbiz.de/10013120150
Both financing and risk management involve promises to pay that need to be collateralized, resulting in a financing versus risk management trade-off. We study this trade-off in a dynamic model of commodity price risk management and show that risk management is limited and that more financially...
Persistent link: https://www.econbiz.de/10013092740
The present paper attempts to identify the ways that the United Arab Emirate listed companies manage their financial risk with the use of derivatives. By examining the companies' annual reports and financial reviews for the year 2015. The studied revealed that low use of the financial...
Persistent link: https://www.econbiz.de/10012951436
We study risk management in financial institutions using data on hedging of interest rate and foreign exchange risk. We find strong evidence that institutions with higher net worth hedge more, controlling for risk exposures, across institutions and within institutions over time. For...
Persistent link: https://www.econbiz.de/10012903889