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 …

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

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 …

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 …

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

comparable to that of returns in stock markets. Evidence is shown that there may be only minimal possibility of cross hedging … examined. Such markets, by allowing hedging of these aggregate income risks, might make for dramatically more effective … international macroeconomic risk sharing than is possible today. Retail institutions are described that might develop around such …

average risk tolerance across investors. The same constant applies to every real foreign investment held by every investor … market risk premia, an average of world market volatilities, and an average of exchange rate volatilities, where we take the … exchange risk approaches zero, the constant will be equal to one minus the ratio of the variance of the world market return to …

the unpriced risk. We apply our methodology to hedge out unpriced risk in the Fama and French (2015) five-factors. We find …

government risk facing investors in medical innovation. This risk slows down medical innovation because investors must be …&D investors to better share the pipeline risk associated with FDA approval with broader capital markets. Using historical FDA … from offering them. Using various unique data sources, we find that FDA approval risk has a low correlation across drug …

We study a firm that justifies its novel use of equity derivatives as a cash-flow hedging strategy. Our purpose is to … understand the challenge of translating risk management theory into managerial action. Cephalon Inc., a biotech firm, bought a … hedging concepts articulated by Froot, Scharfstein and Stein (1993). In applying the theory to practice, there are lessons for …