Mar 2023
The IUP Journal of Financial Risk Management
Financial Literacy and Risk Management: A Study on Small Independent Women Entrepreneurs
The paper seeks to identify the extent to which financial literacy influences the risk management practices of women entrepreneurs and to explore the factors that contribute to the development of their financial literacy skills. It utilizes a mixed-methods approach, incorporating both quantitative surveys and qualitative interviews with a sample of small independent women entrepreneurs to collect data on their financial literacy levels and risk management practices. The study found a significant positive relationship between financial literacy and risk management among small independent women entrepreneurs. Women entrepreneurs with higher financial literacy levels were more likely to engage in effective financial risk management practices, such as regular financial monitoring, contingency planning, and diversification of income streams. The interviews revealed that financial literacy was crucial in empowering women entrepreneurs to make informed decisions about their businesses and manage risks effectively. Moreover, the study found that the relationship between financial literacy and financial risk management is stronger than that between financial literacy and business risk management. Access to finance is also a significant predictor of financial risk management among women entrepreneurs. The results of this study will be useful to policymakers, educators, and business support organizations seeking to promote financial literacy and improve risk management practices among this population.
Research on Asset-Liability Management: A Bibliometric Analysis
The aim of this paper is to identify the most significant studies and authors, as well as outline the distribution and effects of publications in the field of Asset-Liability Management (ALM) between 1983 and 2023, using bibliometric analysis. The data was extracted from the Scopus database for the period 1983-2023. A total of 488 documents were derived using VOSviewer and Biblioshiny software. The results show that the most productive journal is Insurance: Mathematics and Economics, the most cited author is Li D, and the United States is the top country with the highest level of collaboration in ALM research. Moreover, to know the current trend, a thematic map of keywords is analyzed using Biblioshiny R package and the co-occurrence of keywords using VOSviewer software. The study found that asset-liability management is the trending topic among researchers in 2023.
Grover's G-Score Analysis: An Indian Perspective on Financial Distress
In 1968, when the bankruptcy prediction model was introduced, it became significant for every type of business entity to predict the future using the information available to them at the time. Taking corrective measures and reducing financial distress is achieved through its early detection. In this paper, listed Indian companies are analyzed to determine their financial health or levels of financial distress. Grover's G-Score prediction model effectively predicts a company's financial distress level. For the study, 88 companies representing various sectors were selected, and four years of data was analyzed. Grover's G-Score correctly predicted the occurrence of non-financial distress by 95.81%, while financial distress was correctly predicted by 67.35%. The number of distressed companies is also increasing yearly, which is alarming for our economy, and significant regulatory reforms are therefore needed to counter these trends.
Caselet - Portfolio Growth and Risk Management: Using Index Options and Index Futures
We have taken three scenarios/cases to evaluate the growth of the portfolio and risk management under various circumstances:
- Akash is an investor and has a portfolio of stocks worth 1 cr. He wants to grow the portfolio at a rate equivalent to the growth of a market index like the Nifty, but at the same time wants to protect the portfolio from huge drawdowns on account of volatility in the stock markets. His time horizon is five years.
- Prashant is an investor and has cash of 1 cr. He is looking at avenues for investing the capital. His objective is to protect the capital and, at the same time, have a higher return than the market. He does not have much time and does not want to monitor his portfolio and transactions on a daily or weekly basis. His time horizon is ten years.
- Varun is an investor and has cash of 1 cr. He is looking to start a restaurant business, and he expects a capital of 60 lakh for the same. At the same time, he wants his capital to grow and provide him with higher returns than the market. He does not want to see his portfolio in red beyond 10%. He has a time horizon of five years
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