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This article investigates the pricing of volatility risk in agricultural commodity markets. We show theoretically that the cost of bearing volatility risk can be measured using returns to delta-neutral straddles. Using a sample of options for five commodities (corn, soybeans, Chicago wheat, live...
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sources. Risk is a pervasive feature of law and public policy. Decision-making in these domains often takes place in the … employs the basic tools of decision theory (probability and utility) to measure the likelihood as well as the costs and … of risk that has been systematically ignored. We call it “super-risk.” Super-risk occurs when, at the time of decision …
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