portfolios could hedge some of the risk of default by taking positions in futures or options markets for residential real estate …

Many people assume that the most significant risk in the housing market is that homeowners are exposed to fluctuations … finds that, even though house price risk endogenously increases with rent risk, the latter empirically dominates for most … households so housing market risk actually increases homeownership rates and house prices. Further, the net effect of rent risk …

associated with average returns. We show that the resulting portfolios are likely to capture not only the priced risk associated … with the characteristic, but also unpriced risk. We develop a procedure to remove this unpriced risk using covariance …

We propose and implement a procedure to dynamically hedge climate change risk. To create our hedge target, we extract … hedge portfolios. We discipline the exercise by using third-party ESG scores of firms to model their climate risk exposures …. We show that this approach yields parsimonious and industry-balanced portfolios that perform well in hedging innovations …

that they would be exposed to risk from fluctuations in their electricity cost. The concern seems to be that a customer … larger than it had budgeted for. I analyze the magnitude of this risk, using demand data from 1142 large industrial customers …, and then ask how much of this risk can be eliminated through various straightforward financial instruments. I find that …

a simple extension of the long-run risk model … risks. Portfolios hedging macro uncertainty have historically earned zero or even significantly positive returns, while …

the regimes are small for moderate levels of risk aversion, and the intertemporal hedging demands induced by time … international diversification is still valuable with regime changes. Currency hedging imparts further benefit. The costs of ignoring …

be attractive to risk-minimizing global equity investors despite their low average returns. The risk-minimizing currency … little evidence that risk-minimizing investors should adjust their currency positions in response to movements in interest …

hedging non-dollar borrowing rates. These results have implications for the practice of hedging non-dollar interest rate risk … measure its hedging effectiveness. This synthetic Eurocurrency interest rate futures contract is obtained by combining …

Liquidity risk in banking has been attributed to transactions deposits and their potential to spark runs or panics. We … show instead that transactions deposits help banks hedge liquidity risk from unused loan commitments. Bank stock …. This deposit-lending risk management synergy becomes more powerful during periods of tight liquidity, when nervous …