What is exchange rate risk?

Management Dictionary
Corporate and Market Finance

158 vues

Foreign exchange risk is the financial risk associated with fluctuations in exchange rates between currencies, affecting businesses, investors, and individuals in their international transactions. It can impact income, investments, or loan repayments depending on currency movements. A distinction is made between transaction risk, conversion risk, and economic risk. Its management relies on internal mechanisms (invoicing, netting) or external mechanisms (futures contracts, options), with a balance to be struck between cost and protection.

Liens et ressources

Mots clés

Currency, Financial Instruments, Fluctuation, Hedging, International Transaction

Auteur.e(s)

AJILI BEN YOUSSEF Wissem
Associate Professor of Finance
EM Normandie

Institution(s)

Vidéos de la même institution

03:54

From Daughter to Successor: Building Legitimacy in the Family Business

The existing literature on the legitimacy of daughters in the succession process of family businesses tends to separate the analysis between, on the one hand, the role of successor daughters and, on the other hand, the networks that activate and validate their legitimacy. This separation sustains a dualism in the conceptualization of relationships between successor daughters and the various stakeholders. This study addresses this gap by drawing on Strong Structuration Theory and the analysis of five cases of successor daughters. The results highlight that the social legitimacy of successor daughters in family businesses is the result of a continuous interaction between individual agency and social structures, within a logic of duality. It proposes a conceptualization of legitimacy as a dynamic process of social co-construction. The study reveals the interdependence between personal legitimacy and entrepreneurial legitimacy, which mutually reinforce each other through intertwined structuration cycles. This articulation contributes to the progressive co-construction of social legitimacy, emphasizing its evolving and adaptive nature.

GHAMGUI Nizar - |

Research
Entrepreneurship

02:40

What is social marketing?

Social marketing is an approach that leverages marketing techniques to encourage behaviors that have a positive impact on society. Unlike traditional marketing, which primarily aims to maximize sales, social marketing seeks to address issues such as public health, the environment, and human rights. It relies on a deep understanding of the needs and obstacles of the target audience, as well as strategic partnerships. For example, campaigns might encourage people to reduce their plastic consumption or engage in regular physical activity. To succeed, it's not just about communication; it's also about making desired behaviors more accessible, more appealing, and less expensive. By integrating these elements, social marketing contributes to improving collective well-being.

TRELOHAN Magali - |

Management Dictionary
Marketing, Sales and Communication

02:47

What are pro-environmental behaviors?

Pro-environmental behaviors refer to actions aimed at reducing human impact on the environment, whether individual (such as recycling or adopting eco-responsible consumption) or collective (advocating for climate policies). Historically linked to the environmental awareness of the 1970s, these behaviors are now crucial in the face of the climate emergency. However, they encounter psychological, economic, and practical obstacles. To encourage them, it is essential that public and private actors make these ecological actions more accessible and socially valued. These behaviors, while indispensable, must be integrated into collective and systemic initiatives for a sustainable transition.

TRELOHAN Magali - |

Management Dictionary
Marketing, Sales and Communication, Public Management, Sustainable Development and CSR

01:55

What is Strategic Renewal?

In times of crisis, SME entrepreneurs update and replace the firm’s resources and capabilities within strategic renewal processes in order to maintain organizational resilience. Appearing in the form of internal development and external sourcing, the outcomes of strategic renewal are explained by the synergy of individual, organizational, and environmental factors that reinforce SMEs’ dynamic capabilities. This research presents a qualitative comparative analysis (QCA) of the conjunctural causality between multi-level dynamic capability configurations and SME strategic renewal outcomes.

WANG Yihan - EM Normandie |

Management Dictionary
Strategic Management, Sustainable Development and CSR

Vidéos de la même thématique

What is the Initial Coin Offering?

An Initial Coin Offering (ICO) is a modern fundraising method for start-ups, similar to crowdfunding but using digital tokens instead of traditional cash or rewards. Investors purchase these tokens, which they can later use to buy the product or resell for potential profit. ICOs provide entrepreneurs with a global financing opportunity while offering investors early access to innovative projects. Overall, ICOs connect entrepreneurship, finance, and blockchain technology, making them a revolutionary tool for start-up funding.

DELL’ERA Michele - EDC Business School |

Management Dictionary
Corporate and Market Finance, Entrepreneurship

Environmental Tax Policies in Emerging Markets: Does Confidence in Political Institutions Matter?

The goal of this study is to examine how environmental taxes influence the comparative advantage in environmental products and carbon emissions within emerging economies. To gain a better understanding, we examine whether this impact changes depending on the level of government integrity. The results indicate that increased environmental taxes mitigate the comparative advantage in environmental goods for emerging markets. However, for countries with high levels of government integrity, higher environmental taxes enhance their competitive edge in environmental goods. Additionally, our findings show that although a rise in environmental taxes is associated with higher carbon emissions, raising such taxes results in a reduction in carbon emissions for emerging economies with solid government integrity. These findings suggest that robust political institutions are crucial in promoting the comparative advantage of emerging markets in environmental goods and mitigating climate change. In the absence of substantial confidence in political or governmental institutions, the efficient implementation of climate taxes poses considerable challenges. Furthermore, we observe that an increase in the comparative advantage of environmental goods results in a decrease in carbon emissions.

KOCAARSLAN Baris - EDC Business School |

Research
Corporate and Market Finance

In Machine Learning We Trust: A Bankruptcy Prediction Application

Recently, ensemble-based machine learning models have been widely adopted and have demonstrated their effectiveness in bankruptcy prediction. However, these algorithms often function as black boxes, making it difficult to understand how they generate forecasts. This lack of transparency has led to growing interest in interpretability methods within artificial intelligence research. In this paper, we assess the predictive performance of Random Forest, LightGBM, XGBoost, and NGBoost (Natural Gradient Boosting for probabilistic prediction) on French firms across various industries, with a forecasting horizon of one to five years. We then apply Shapley Additive Explanations (SHAP), a model-agnostic interpretability technique, to explain XGBoost, one of the best-performing models in our study. SHAP highlights the contribution of each feature to the model’s predictions, enabling a clearer understanding of how financial and macroeconomic factors influence bankruptcy risk. Moreover, it allows for the explanation of individual predictions, making black-box models more applicable in credit risk management.

NGUYEN Hoang Hiep - EM Normandie |

Research
Corporate and Market Finance

Algorithmic trading, what if it is just an illusion?

We experimentally investigate whether and how the potential presence of algorithmic trading (AT) in human-only asset markets can influence humans’ price forecasts, trading activities and price dynamics. Two trading strategies commonly employed by high-frequency traders, spoofing (SP) – associated with market manipulation – and market making (MM) – seen as liquidity provision – are considered.

JACOB-LEAL Sandrine - FNEGE |

Research
Corporate and Market Finance

Corporate and Market Finance

What is exchange rate risk?

Auteur.e(s)

Institution(s)

Vidéos de la même institution

Vidéos de la même thématique

S'abonner aux vidéos FNEGE MEDIAS