Purpose – The purpose of this paper is to examine the valuation effect of derivatives use in the French market using a sample of 250 non-financial firms over the period 2000-2002. Design/methodology/approach – The approach taken is application of linear regression framework and panel data...

Purpose – The purpose of this paper is to present an overview of weather derivatives markets and to highlight the importance of the contributing factors for weather risk management such as weather sensitivity, weather forecast, and economic growth. In this paper, the prospective of using...

Purpose – The purpose of this paper is to explore the roles of diversification, hedging, and a third risk-reduction process – “pacification” – in risk finance. Design/methodology/approach – After briefly reviewing the concepts of diversification and hedging, a simple mathematical...

Purpose – The purpose of this paper is to examine the current status of risk management in Indian companies and explore the reasons for the adoption or lack of adoption of integrated approach to risk management. It identifies the imperatives for implementation of comprehensive risk management...

Purpose – The purpose of this paper is to examine the uncertainty of acquiring the lowest possible airfare when contemplating the purchase of a ticket. A real option model is applied to value insurance contracts that could be offered to passengers to cope with price risk. Furthermore, the...

Purpose – The purpose of this paper is to apply safety-first portfolio principles in an environment where financial risk exists because of the probability of terrorist attacks, where the catastrophic events of September 11, 2001 (911) are the focal point of the analysis....

Purpose – The paper aims to explore a risk-finance context in which less information may be preferable to more information. Design/methodology/approach – Insurance companies collect a variety of information on potential policyholders to support two fundamental components of risk...

Purpose – The purpose of this paper is to communicate the science and art of stop losses. Design/methodology/approach – This paper uses theoretical reasoning, Monte Carlo simulation, and empirical data to support and validate the claims made. Findings – The paper expands on the reasoning...

Purpose – The purpose of this paper is to identify effects of prepayment risk on performance of commercial banks in the USA. Understanding how various risks impact banks' performance can help to improve performance of financial institutions and better estimate risk premia charged by banks on...

Purpose – The paper aims to examine theoretically valuation of weather derivatives and their hedging roles in corporate risk management. Design/methodology/approach – The paper introduces an extended financial market model in which the weather risk is included as an independent random...