With continued growth in international trade, companies today operate in different regions across the globe. This exposes their assets, revenues, and earnings to multiple economic activities in regions other than their home country. The concept of Economic Exposure (EE) can be broadly defined as the sensitivity of a company’s performance to the economies of the countries where it does business. There are many ways of defining economic exposure; some of them are sales, assets, operating...

The concept of risk aversion is one of the four main ingredients in modern active portfolio construction theory. Risk aversion represents the amount of return required by an investor for an extra unit of risk and thus the tradeoff between risk and return. In other words, risk aversion states in which portfolio on the efficient frontier the portfolio manager is interested in.