Abstract
The management of foreign exchange exposure is essential to reduce vulnerability of firms to unexpected changes in the exchange rate, which adversely affect the profit margin, cash flow and value of the business. In the early eighties, Adler and Dumas lead the discipline of managing risk exposure with the help of econometric techniques that are effective in stable conditions. However, the main feature of modern economies is the uncertainty and instability of the environment. Under such circumstances, the traditional models are insufficient and ineffective in making decisions. It is therefore necessary to address decisions under uncertain conditions, from another perspective. The objective of the present work is to identify the determinants of exchange risk exposure, by applying of forgotten effects model. The results show that the lack of information, the poor financial planning, and the entrepreneur attitude, are important aspects that have been forgot in the identification of exchange risk exposure. The findings, help companies redefine the action strategies to develop an efficient program of risk management.
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Notes
- 1.
In fact, the origin could be set in 1922, when Lukasiewicz questioned classical Boolean logic (true and false values) and proposed a logic of certain values in the unit interval as a generalization of his trivaluada logic. In the thirties were valued logics proposals for any number of certain values (equal to or greater than 2), identified by rational numbers in the range [0, 1].
- 2.
The valuation concept is similar to a numerical assignment made subjectively. Subjectivity is the characteristic that distinguishes the notion of measure, eminently objective (Gil et al., 2004).
- 3.
This is a calculation program, that allow work with fuzzy models to capture the called forgotten effects at the causality relations.
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Vizcarra, G.A., Gil-Lafuente, A.M., Ochoa, E.A. (2018). Identification of the Exchange Risk Exposure by Applying the Model of Forgotten Effects. In: Gil-Lafuente, A., Merigó, J., Dass, B., Verma, R. (eds) Applied Mathematics and Computational Intelligence. FIM 2015. Advances in Intelligent Systems and Computing, vol 730. Springer, Cham. https://doi.org/10.1007/978-3-319-75792-6_28
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