理解exposure风险暴露中的暴露 in Finance

• Risk Exposure

  Risk Exposure is the measure of potential future loss resulting from a specific activity or event.

• Finiancial Exposure

  In finance, exposure refers to the amount of money that an investor has invested in a particular asset.

  It represents the amount of money that the investor could lose on an investment.

  Financial exposure can be expressed in money terms, or as a percentage of an investment portfolio.

  for example, if an investor has $10000 invested in stock with whole amount is $50000 :

  1. In money terms

     the exposure is $100000

  2. In percentage terms

     the exposure to stocks is 20%.

• exposure in finance

  Exposure is an important concept to understand in finance, because it is tied to risk.

  Whether investing or trading, monitoring financial exposure on a regualr basis is an important part of managing risk.

  Commonly, investors analyse their exposure to particular stocks, sectors, asset classes and geographic regions.

  It’s important to understand that having a high exposure to one particular investment increases overall risk.

• Types of exposures

  The term exposure is used in many different ways in finance.

  1. Market exposure

     Market exposure refers to the division of assets within an investment portfolio.

     It refers to the amount invested in a particular type of security, investment, sector or geographic region.

     Market exposure can be expressed in money terms or as a percentage, although it is more commonly expressed as a percentage.

  2. Financial exposure

     Financial exposure, on the other hand, refers to the amount of money that can potentially be lost on an investment.

     The leverage can increase an investor’s financial exposure.

  3. Currency Exposure

     In the forex markCurrency exposure refers to an investor’s exposure to a particular currency.

     If the value of an investment can be affected by movements in currencies, then the investor has currency exposure.

  4. Risk exposure

     Risk exposure refers to the amount of risk an investor has taken on a particular investment.

     It refers to the quantified loss potential of an investment or activity.

  5. Stock exposure

     Stock exposure refers to an investor’s exposure to a particular stock.

     Stock exposure can be expressed in monetary terms or in terms of the proportion of the investor’s portfolio.

• How to reduce financial exposure

  The way to reduce financial exposure:

  1. sell particular asset
  2. through diversification
  3. diversify by asset class
  4. hedging

• Factor Exposure

  exposure||risk exposure||financial exposure||market exposure||stock exposure 是同一类概念，用number term or percentage term来表示。表示某一项资产的数量或比例。

  Factor Exposure是指因子的exposure。

  Factor Exposure 源自Fama

• References

1. What does exposure mean?
2. Measuring Portfolio Factor Exposures: A Practical Guide
3. THE COMPLEXITY OF FACTOR EXPOSURE ANALYSIS