A Study on Financial Risk Analysis in Pension Funds Investment: an Implication of Exchange Rate Exposure

摘要

This paper tried to unveil the multifarious risks that were contained in pension fund investment. Apart from analyzing the exchange rate risk that affects the optimal value of pension funds firms, the content of the paper revealed two major risks: financial market related risks and non-financial market risks. Even though risk cannot be eliminated totally but with effective portfolio management of securities asset, risk can be diversified. It is recommended that pension funds companies should establish an ERM unit to be headed by an expert in both risk and investment analysis to enable them mitigate risks efficiently and effectively.