We find that firm value is reduced via industrial diversification and this reduction in value depends upon a firm's technology intensity. We consider that asymmetric information problems are more sevedoi:10.1007/s11156-017-0685-2Borah, Nilakshi...
The risk that increasing oil prices will hurt the profitability of one's firm is an example of a systematic risk. TRUE or FALSE. True or false? It is not possible to eliminate or reduce market risk through diversification. If stocks were perfectly positively correla...
their true intentions, they could penalize those com-panies in the stock market, and therefore, their CSR engagement may increase,rm risk. Can a,rm in controversial industries reduce,rm risk by engaging in CSR activities while producing products harmful to human being, society, or environment?Or...
Define Investment Risk Premium (IRP) = (B Market Risk Premium) Describe what portfolio diversification is and explain why it works to reduce risk. A) How does hedging differ from insurance? B) Why does hedging create value only if the ...
Conventional wisdom in banking argues that diversification tends to reduce bank risk and improve performance, but the recent financial crisis suggests that... AN Berger,I Hasan,I Korhonen,... - 《Social Science Electronic Publishing》 被引量: 44发表: 2010年 How does the stock market value bank...
Since diversification is material to banks, Khattak et al., 2023 are convinced that digitalization leads to riskier and more fragile banks than traditional counterparts. With the application of Fintech, banks tend to increase their risk tolerance, and through liquidity creation by establishing ...
By diversifying a portfolio, investors can potentially reduce risk and sometimes increase long-term gains. Gold won't always beat stocks and bonds as it did in 2022, but that exemplifies how the asset can provide diversification and perhaps reduce losses. Sometimes the inverse will happen, where...
“keeping more skin in the game,” would limit risk taking by financial institutions. We address this question by examining commercial banking from 1910 through 1955, and by focusing our attention on key regulatory changes related to risk taking that arose as part of the New Deal of the 1930...
Diversification is a key principle in risk management. By spreading your investments across various asset classes, industries, and geographic regions, you can reduce the impact of any single investment's poor performance on your overall portfolio. Diversification can be achieved through: Mutual Funds a...
Covariance can maximize diversification in a portfolio of assets. Adding assets with a negative covariance to a portfolio reduces the overall risk. At first, this risk drops off quickly; as additional assets are added, it drops off slowly. Diversifiable risk cannot significantly be reduced beyond ...