Financial Risk Management
Perception of Investors and Financial Experts Regarding the Impact of Fluctuations in Exchange Rate on Share Prices

Article Details
Pub. Date : Dec, 2019
Product Name : The IUP Journal of Financial Risk Management
Product Type : Article
Product Code : IJFRM51912
Author Name : Roshan Kumar
Availability : YES
Subject/Domain : Finance Management
Download Format : PDF Format
No. of Pages : 11

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Abstract

The exchange rate is an important macroeconomic variable for any country and plays a vital role in enhancing global trade, investment and financial transactions. This paper is based on the investigation of perception of investors and financial experts regarding the impact of fluctuations in exchange rate on share price, done by analyzing the primary data obtained from the investors and financial experts regarding exchange rate fluctuations and its impact on stock price. Nonparametric chi-square test is used to find out the perception of the investors and experts.


Description

The exchange rate is used to measure global competitiveness. It is also known as an indicator of the competitiveness of currency of any country against the value of currency in relation to another currency. Exchange rate affects business, trade, and prices of commodities among countries. It determines the price actually paid when each transaction occurs. The foreign exchange markets are influenced by various variables of the economy such as imports, exports, investments, and disinvestments. The foreign exchange market affects the performance of the stock exchanges. The flexibility of exchange rate of a currency helps to maintain the balance of international payments of a nation. The foreign exchange rate is quite sensitive to make an impact on merchandising and financial decisions of the country, mainly in subsequent assets of share prices. This presumption can hold in a short period of time but can change rapidly in the face of changing published report of the economy, position of the current account, perception, strategy or business, social and political events.


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