Hedge fund managers differ in ability and investors want to distinguish good ones from bad. Via the design of their … investment strategies, better fund managers want to ease this inference problem while worse fund managers want to complicate it … induces less able hedge fund managers to adopt risky investment strategies that maximize the probability of meeting this …

environment in which firms operate. Corporate managers, however, rank risk management as one of their most important objectives … suggests that managers act in the best interest of shareholders. They hedge to reduce real costs like taxes, costs of financial … managers maximise their personal utility rather than the market value of equity. Their hedging strategy, therefore, is …