This paper proposes a simple homogeneous dynamic model of investment and corporate risk management for a financially … constrained firm. Following Froot, Scharfstein, and Stein (1993), we define a corporation's risk management as the coordination of … investment and financing decisions. In our model, corporate risk management involves internal liquidity management, financial …

quot;Risk managementquot; in securities markets refers to the oversight of portfolio managers and professional traders … risk-taking behavior, is measured by principals using security market prices. We study the optimality of the practice of …

aggregate uncertainty. Gains from more efficient capital allocation and gains from risk sharing are accounted for simultaneously …