Purpose – This article aims to examine the state of risk management in agriculture and power sector of India, evaluate the effectiveness of weather derivatives as alternative risk management tools and basic framework required to implement them. Design/methodology/approach – Applications of...

Purpose – The development of alternative investment has not yet been accompanied by genuine consideration of the specific characteristics of the risks and returns of hedge funds with regard to the provision of information to investors. To fill the gap, in 2004 EDHEC launched an international...

Purpose – Interest rate risk immunization is one of the key concerns for fixed income portfolio management. In recent years, the affluence of new risk measures has emphasized the importance of comparing them with the classic approaches. As a result, one question arises: what is the relation...

Purpose – To consider why the law of large numbers does not play a more significant role in determining an insurer's financial leverage. Design/methodology/approach – Insurer-group data show that there is little relationship between an insurer's premium volume and its overall leverage (i.e....

Purpose – For publicly traded firms, calculating the cost of capital is predicated typically on information from the financial markets. Small businesses do not have the necessary market-based information. As an alternative to traditional proxy approaches, this paper argues for a multi-criteria...

Purpose – Demonstrates the feasibility of, and introduces a practical approach to enhancing, reinsurance efficiency using index-based instruments. Design/methodology/approach – First reviews the general mathematical framework of reinsurance optimization. Next, illustrates how index-based...

Purpose – This paper aims to examine the state of risk management practices among Malaysian listed firms and evaluates the value-relevance of the notional amount of foreign-exchange and interest-rate derivatives (FCDs) used by listed firms over the period 2003-2007. Design/methodology/approach...

Purpose – This paper attempts to summarize the information contained in bank financial statements on the risk management capabilities of banks and then ascertains the sensitivity of bank stocks to risk management. Design/methodology/approach – The theoretical framework is derived from a...

Purpose – The purpose of this paper is to explore the extent of the so-called “small-sample problem” within quantitative exchange-rate risk management. Design/methodology/approach –The authors take a closer look at the frequency distribution of nominal price changes in the European...

Purpose – The purpose of this paper is to present a simulation-based approach for modeling multi-year non-life insurance risk in internal risk models. Strategic management in an insurance company requires a multi-year time horizon for economic decision making, for example, in the context of...